Critical Analysis: Enersys (NYSE:ENS) & Energizer Holdings (ENR)

Enersys (NYSE: ENS) and Energizer Holdings (NYSE:ENR) are both mid-cap industrial products companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.

Dividends

Enersys pays an annual dividend of $0.70 per share and has a dividend yield of 1.1%. Energizer Holdings pays an annual dividend of $1.10 per share and has a dividend yield of 2.7%. Enersys pays out 18.9% of its earnings in the form of a dividend. Energizer Holdings pays out 36.5% 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.

Profitability

This table compares Enersys and Energizer Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enersys 6.86% 18.90% 9.05%
Energizer Holdings 10.97% 529.84% 10.80%

Earnings & Valuation

This table compares Enersys and Energizer Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Enersys $2.39 billion 1.13 $333.11 million $3.71 16.71
Energizer Holdings $1.72 billion 1.49 $360.30 million $3.01 13.73

Energizer Holdings has higher revenue, but lower earnings than Enersys. Energizer Holdings is trading at a lower price-to-earnings ratio than Enersys, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings for Enersys and Energizer Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enersys 0 0 2 0 3.00
Energizer Holdings 0 3 2 0 2.40

Enersys currently has a consensus target price of $82.50, indicating a potential upside of 33.04%. Energizer Holdings has a consensus target price of $55.40, indicating a potential upside of 34.04%. Given Energizer Holdings’ higher possible upside, analysts plainly believe Energizer Holdings is more favorable than Enersys.

Insider and Institutional Ownership

97.5% of Enersys shares are owned by institutional investors. Comparatively, 92.5% of Energizer Holdings shares are owned by institutional investors. 1.4% of Enersys shares are owned by insiders. Comparatively, 1.7% of Energizer Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Enersys has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500. Comparatively, Energizer Holdings has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

Energizer Holdings beats Enersys on 9 of the 15 factors compared between the two stocks.

About Enersys

EnerSys is a manufacturer, marketer and distributor of industrial batteries. The Company manufactures, markets and distributes related products, such as chargers, power equipment, outdoor cabinet enclosures and battery accessories, and provides related after-market and customer-support services for industrial batteries. Its segments based on geographic regions consist of Americas, which consists of North and South America; EMEA, which includes Europe, the Middle East and Africa, and Asia, which includes Asia, Australia and Oceania. The Company’s product lines include reserve power and motive power products. Its Reserve power products also include thermally managed cabinets and enclosures for electronic equipment and batteries. The Company’s motive power products are used to provide power for electric industrial forklifts used in manufacturing, warehousing and other material handling applications. They are used as mining equipment, diesel locomotive starting and other rail equipment.

About Energizer Holdings

Energizer Holdings, Inc. is a manufacturer, marketer and distributor of household batteries, specialty batteries and lighting products. The Company is a designer and marketer of automotive fragrance and appearance products. It operates through four geographic segments: North America, which consists of the United States and Canada; Latin America, which includes its markets in Mexico, the Caribbean, Central America and South America; Europe, the Middle East and Africa (EMEA), and Asia Pacific, which consists of its markets in Asia, Australia and New Zealand. The Company offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air and silver oxide constructions. These products are sold under the Energizer and Eveready brands in the performance, premium and price segments and include primary, rechargeable, specialty and hearing aid products. It manufactures, distributes and markets lighting products, including headlights, lanterns, kid’s lights and area lights.

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