Critical Comparison: Fortive (NYSE:FTV) vs. Perma-Pipe International (NASDAQ:PPIH)

Perma-Pipe International (NASDAQ:PPIH) and Fortive (NYSE:FTV) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for Perma-Pipe International and Fortive, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perma-Pipe International	0	1	1	0	2.50
Fortive	2	9	2	0	2.00

Perma-Pipe International currently has a consensus price target of $37.00, indicating a potential upside of 16.13%. Fortive has a consensus price target of $62.82, indicating a potential upside of 9.41%. Given Perma-Pipe International’s stronger consensus rating and higher probable upside, equities analysts plainly believe Perma-Pipe International is more favorable than Fortive.

Profitability

This table compares Perma-Pipe International and Fortive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perma-Pipe International	6.89%	21.58%	8.79%
Fortive	12.38%	15.33%	8.23%

Earnings and Valuation

This table compares Perma-Pipe International and Fortive”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perma-Pipe International	$210.93 million	1.24	$17.03 million	$1.90	16.77
Fortive	$4.16 billion	4.17	$579.20 million	$1.69	33.97

Fortive has higher revenue and earnings than Perma-Pipe International. Perma-Pipe International is trading at a lower price-to-earnings ratio than Fortive, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Perma-Pipe International has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Fortive has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Institutional and Insider Ownership

28.4% of Perma-Pipe International shares are held by institutional investors. Comparatively, 94.9% of Fortive shares are held by institutional investors. 1.1% of Perma-Pipe International shares are held by insiders. Comparatively, 0.7% of Fortive shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Fortive beats Perma-Pipe International on 8 of the 14 factors compared between the two stocks.

About Perma-Pipe International

Perma-Pipe International Holdings, Inc., together with its subsidiaries, engineers, designs, manufactures, and sells specialty piping and leak detection systems. It offers insulated and jacketed district heating and cooling piping systems for energy distribution from central energy plants to various locations; and primary and secondary containment piping systems for transporting chemicals, hazardous fluids, and petroleum products, as well as engages in the coating and insulation of oil and gas gathering and transmission pipelines. The company also offers liquid and powder based anti-corrosion coatings for external and internal surfaces of steel pipe, including shapes like bends, reducers, tees, and other spools/fittings that is used in pipelines for the transportation of oil and gas products and potable water. It has operations in the United States, Canada, the Middle East, North Africa, Europe, India, and internationally. The company was formerly known as MFRI, Inc. and changed its name to Perma-Pipe International Holdings, Inc. in March 2017. Perma-Pipe International Holdings, Inc. was incorporated in 1993 and is headquartered in Spring, Texas.

About Fortive

Fortive Corporation designs, develops, manufactures, and services professional and engineered products, software, and services in the United States, China, and internationally. It operates in three segments: Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions. The Intelligent Operating Solutions segment provides advanced instrumentation, software, and services, including electrical test and measurement, facility and asset lifecycle software applications, and connected worker safety and compliance solutions for manufacturing, process industries, healthcare, utilities and power, communications and electronics, and other industries. This segment markets its products and services under the ACCRUENT, FLUKE, GORDIAN, INDUSTRIAL SCIENTIFIC, INTELEX, PRUFTECHNIK, and SERVICECHANNEL brands. The Precision Technologies segment offers electrical test and measurement, sensing and material technologies for industrial, power and energy, automotive, medical equipment, food and beverage, aerospace and defense, semiconductor, and other general industries under the ANDERSON-NEGELE, GEMS, SETRA, HENGSTLER-DYNAPAR, QUALITROL, PACIFIC SCIENTIFIC, KEITHLEY, and TEKTRONIX brand names. The Advanced Healthcare Solutions segment provides critical workflow solutions comprising instrument sterilization, instrument tracking, design and manufacture of cell therapy equipment, biomedical test tools, radiation detection and safety monitoring, and end-to-end clinical productivity software and solutions under the ASP, CENSIS, CENSITRAC, EVOTECH, FLUKE BIOMEDICAL, INVETECH, LANDAUER, PROVATION, RAYSAFE, and STERRAD brands. Fortive Corporation was incorporated in 2015 and is headquartered in Everett, Washington.