Johnson Controls International (NYSE:JCI) versus DIRTT Environmental Solutions (NASDAQ:DRTT) Critical Review

DIRTT Environmental Solutions (NASDAQ:DRTT) and Johnson Controls International (NYSE:JCI) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Profitability

This table compares DIRTT Environmental Solutions and Johnson Controls International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DIRTT Environmental Solutions	-12.81%	-150.32%	-15.10%
Johnson Controls International	14.32%	22.11%	7.69%

Volatility and Risk

DIRTT Environmental Solutions has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Johnson Controls International has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Institutional and Insider Ownership

58.7% of DIRTT Environmental Solutions shares are owned by institutional investors. Comparatively, 90.0% of Johnson Controls International shares are owned by institutional investors. 40.5% of DIRTT Environmental Solutions shares are owned by company insiders. Comparatively, 0.3% of Johnson Controls International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares DIRTT Environmental Solutions and Johnson Controls International”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DIRTT Environmental Solutions	$170.63 million	0.37	-$54.96 million	($0.25)	-2.40
Johnson Controls International	$23.60 billion	3.58	$3.29 billion	$5.75	24.23

Johnson Controls International has higher revenue and earnings than DIRTT Environmental Solutions. DIRTT Environmental Solutions is trading at a lower price-to-earnings ratio than Johnson Controls International, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for DIRTT Environmental Solutions and Johnson Controls International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DIRTT Environmental Solutions	0	0	0	0	0.00
Johnson Controls International	1	10	12	0	2.48

Johnson Controls International has a consensus price target of $155.50, indicating a potential upside of 11.61%. Given Johnson Controls International’s stronger consensus rating and higher probable upside, analysts plainly believe Johnson Controls International is more favorable than DIRTT Environmental Solutions.

Summary

Johnson Controls International beats DIRTT Environmental Solutions on 13 of the 14 factors compared between the two stocks.

About DIRTT Environmental Solutions

DIRTT Environmental Solutions Ltd. operates as a interior construction company in Canada. Its ICE software provides the industrialized construction system to design, visualize, organize, configure, and install the job. The company offers interior solutions to doors, casework, timber, electrical, networks, access floors, solid, glass, combination, leaf folding, and headwalls. It serves retail, technology, hospitality, manufacturing, energy, healthcare, education, government, military, professional, and financial service sectors. DIRTT Environmental Solutions Ltd. was incorporated in 2003 and is headquartered in Calgary, Canada.

About Johnson Controls International

Johnson Controls International plc, together with its subsidiaries, engages in engineering, manufacturing, commissioning, and retrofitting building products and systems in the United States, Europe, the Asia Pacific, and internationally. It operates in four segments: Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia Pacific, and Global Products. The company designs, sells, installs, and services heating, ventilating, air conditioning, controls, building management, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and fire protection and security products for commercial, industrial, retail, small business, institutional, and governmental customers. It also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, as well as data-driven smart building solutions to non-residential building and industrial applications. In addition, the company offers control software and software services for residential and commercial applications. Johnson Controls International plc was incorporated in 1885 and is headquartered in Cork, Ireland.