Acuity (AYI) & The Competition Critical Review

Acuity (NYSE:AYI) is one of 216 public companies in the “Electrical Equipment” industry, but how does it contrast to its peers? We will compare Acuity to similar businesses based on the strength of its dividends, institutional ownership, analyst recommendations, valuation, earnings, risk and profitability.

Dividends

Acuity pays an annual dividend of $0.80 per share and has a dividend yield of 0.2%. Acuity pays out 4.7% of its earnings in the form of a dividend. As a group, “Electrical Equipment” companies pay a dividend yield of 1.5% and pay out 27.6% of their earnings in the form of a dividend. Acuity has increased its dividend for 3 consecutive years.

Profitability

This table compares Acuity and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acuity	11.45%	20.30%	12.43%
Acuity Competitors	-354.46%	-44.20%	-7.95%

Institutional & Insider Ownership

98.2% of Acuity shares are owned by institutional investors. Comparatively, 37.4% of shares of all “Electrical Equipment” companies are owned by institutional investors. 2.9% of Acuity shares are owned by company insiders. Comparatively, 15.1% of shares of all “Electrical Equipment” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Acuity and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity	0	5	4	0	2.44
Acuity Competitors	2283	5156	7201	437	2.38

Acuity currently has a consensus price target of $374.20, indicating a potential upside of 10.64%. As a group, “Electrical Equipment” companies have a potential upside of 45.06%. Given Acuity’s peers higher possible upside, analysts clearly believe Acuity has less favorable growth aspects than its peers.

Volatility & Risk

Acuity has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Acuity’s peers have a beta of -20.44, suggesting that their average share price is 2,144% less volatile than the S&P 500.

Valuation and Earnings

This table compares Acuity and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Acuity	$4.64 billion	$531.30 million	19.78
Acuity Competitors	$2.41 billion	$146.97 million	20.22

Acuity has higher revenue and earnings than its peers. Acuity is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Acuity beats its peers on 9 of the 15 factors compared.

About Acuity

Acuity Brands, Inc. provides lighting, lighting controls, building management system, location-aware applications in the United States and internationally. The company operates in two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the A-Light, Aculux, American Electric Lighting, Cyclone, Dark to Light, eldoLED, Eureka, Gotham, Healthcare Lighting, Holophane, Hydrel, Indy, IOTA, Juno, Lithonia Lighting, Luminaire LED, Luminis, Mark Architectural Lighting, nLight, OPTOTRONIC, Peerless, RELOCWiring Solutions, and Sensor Switch. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturers, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management solutions, such as products for controlling heating, ventilation, air conditioning, lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems; and building management software that enhances building system management and automates labor intensive tasks. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. The company offers its products and solutions under the Atrius, Distech Controls, and KE2 Therm Solutions brands. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.