Head to Head Analysis: Eaton (NYSE:ETN) versus nVent Electric (NYSE:NVT)

nVent Electric (NYSE:NVT) and Eaton (NYSE:ETN) are both large-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Profitability

This table compares nVent Electric and Eaton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
nVent Electric	12.38%	18.85%	10.30%
Eaton	12.75%	24.58%	9.98%

Valuation & Earnings

This table compares nVent Electric and Eaton”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
nVent Electric	$3.89 billion	5.13	$710.20 million	$4.15	29.72
Eaton	$30.03 billion	4.72	$4.09 billion	$9.83	37.15

Eaton has higher revenue and earnings than nVent Electric. nVent Electric is trading at a lower price-to-earnings ratio than Eaton, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

nVent Electric has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Eaton has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for nVent Electric and Eaton, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
nVent Electric	0	2	16	2	3.00
Eaton	0	2	20	1	2.96

nVent Electric presently has a consensus price target of $197.82, suggesting a potential upside of 60.37%. Eaton has a consensus price target of $484.10, suggesting a potential upside of 32.56%. Given nVent Electric’s stronger consensus rating and higher possible upside, research analysts plainly believe nVent Electric is more favorable than Eaton.

Dividends

nVent Electric pays an annual dividend of $0.84 per share and has a dividend yield of 0.7%. Eaton pays an annual dividend of $4.40 per share and has a dividend yield of 1.2%. nVent Electric pays out 20.2% of its earnings in the form of a dividend. Eaton pays out 44.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. nVent Electric has increased its dividend for 2 consecutive years.

Insider & Institutional Ownership

90.0% of nVent Electric shares are held by institutional investors. Comparatively, 83.0% of Eaton shares are held by institutional investors. 1.7% of nVent Electric shares are held by insiders. Comparatively, 0.1% of Eaton shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

nVent Electric beats Eaton on 10 of the 18 factors compared between the two stocks.

About nVent Electric

nVent Electric plc, together with its subsidiaries, designs, manufactures, markets, installs, and services electrical connection and protection solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company operates through three segments: Enclosures, Electrical & Fastening Solutions, and Thermal Management. The Enclosures segment provides solutions to protect electronics and data in mission critical applications, including data solutions. This segment also offers digital and automation solutions, system integrations, and global services. The Electrical & Fastening Solutions segment provides solutions that connect and protect power and data infrastructure. This segment also offers power connections, fastening solutions, cable management solutions, grounding and bonding systems, and tools and test instruments. The Thermal Management segment offers heat management solutions that protect people and assets. This segment includes heat tracing for freeze protection and process temperature maintenance and control; pipe freeze protection, surface deicing, hot water temperature maintenance, floor heating, fire-rated wiring, and leak detection; and heat trace systems, connected controls, remote monitoring, and annual service programs. The company markets its products through electrical distributors, contractors, and original equipment manufacturers under the CADDY, ERICO, GARDNER BENDER, HOFFMAN, ILSCO, RAYCHEM, SCHROFF, and TRACER brand names. Its products are used for various applications, such as industrial, commercial and residential, infrastructure, and energy. nVent Electric plc was founded in 1903 and is based in London, the United Kingdom.

About Eaton

Eaton Corporation plc operates as a power management company worldwide. The company’s Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems. Its Aerospace segment offers pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, and adapters and regulators; oxygen generation system, payload carriages, and thermal management products; and wiring connectors and cables, as well as hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, and related after-market customers, as well as industrial applications. The company’s Vehicle segment offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry. Its eMobility segment provides voltage inverters, converters, fuses, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. Eaton Corporation plc was founded in 1911 and is based in Dublin, Ireland.