Analyzing Preformed Line Products (NASDAQ:PLPC) & Acuity (NYSE:AYI)

Acuity (NYSE:AYI) and Preformed Line Products (NASDAQ:PLPC) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

Acuity has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Preformed Line Products has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Acuity and Preformed Line Products, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity	0	4	5	0	2.56
Preformed Line Products	0	1	0	1	3.00

Acuity presently has a consensus price target of $397.17, suggesting a potential upside of 20.70%. Preformed Line Products has a consensus price target of $275.00, suggesting a potential downside of 29.96%. Given Acuity’s higher possible upside, equities research analysts clearly believe Acuity is more favorable than Preformed Line Products.

Dividends

Acuity pays an annual dividend of $0.80 per share and has a dividend yield of 0.2%. Preformed Line Products pays an annual dividend of $0.84 per share and has a dividend yield of 0.2%. Acuity pays out 5.3% of its earnings in the form of a dividend. Preformed Line Products pays out 9.5% 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. Acuity has increased its dividend for 3 consecutive years. Acuity is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Acuity and Preformed Line Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acuity	10.25%	20.26%	12.21%
Preformed Line Products	5.82%	10.64%	7.65%

Institutional and Insider Ownership

98.2% of Acuity shares are held by institutional investors. Comparatively, 41.2% of Preformed Line Products shares are held by institutional investors. 2.9% of Acuity shares are held by company insiders. Comparatively, 33.0% of Preformed Line Products shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Acuity and Preformed Line Products”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acuity	$4.35 billion	2.27	$396.60 million	$15.08	21.82
Preformed Line Products	$740.15 million	2.59	$35.28 million	$8.88	44.22

Acuity has higher revenue and earnings than Preformed Line Products. Acuity is trading at a lower price-to-earnings ratio than Preformed Line Products, indicating that it is currently the more affordable of the two stocks.

Summary

Acuity beats Preformed Line Products on 13 of the 18 factors compared between the two stocks.

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.

About Preformed Line Products

Preformed Line Products Company, together with its subsidiaries, designs and manufactures products and systems that are used in the construction and maintenance of overhead, ground-mounted, and underground networks for the energy, telecommunication, cable, data communication, and other industries. The company offers optical ground wire products to support, protect, terminate, and splice transmission and distribution lines, as well as bolted, welded, and compressed connectors for substations; and string hardware products, polymer insulators, wildlife protection, substation fittings, and motion control devices. It also provides rugged outside plant closures to protect and support wireline and wireless networks, such as copper cable or fiber optic cable from moisture, environmental hazards, and other contaminants; and hardware assemblies, pole line hardware, plastic products, cable dynamics/vibration solutions, interior/exterior connectors, tools, and urethane solutions that are used by energy, renewable energy, communications, cable, and special industries for various applications. The company serves public and private energy utilities and communication companies, cable operators, governmental agencies, contractors and subcontractors, distributors, and value-added resellers in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It markets its products through a direct sales force, as well as through manufacturing representatives. Preformed Line Products Company was incorporated in 1947 and is headquartered in Mayfield Village, Ohio.