Head to Head Analysis: Rexnord Corporation (RXN) & Barnes Group (B)

Rexnord Corporation (NYSE: RXN) and Barnes Group (NYSE:B) are both mid-cap industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Institutional and Insider Ownership

86.8% of Barnes Group shares are owned by institutional investors. 3.5% of Rexnord Corporation shares are owned by insiders. Comparatively, 8.5% of Barnes Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Rexnord Corporation and Barnes Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rexnord Corporation 0 1 3 0 2.75
Barnes Group 0 3 3 0 2.50

Rexnord Corporation presently has a consensus target price of $26.00, indicating a potential upside of 8.65%. Barnes Group has a consensus target price of $65.60, indicating a potential upside of 3.49%. Given Rexnord Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Rexnord Corporation is more favorable than Barnes Group.

Dividends

Barnes Group pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Rexnord Corporation does not pay a dividend. Barnes Group pays out 19.7% of its earnings in the form of a dividend. Barnes Group has raised its dividend for 4 consecutive years.

Volatility & Risk

Rexnord Corporation has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500. Comparatively, Barnes Group has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500.

Valuation and Earnings

This table compares Rexnord Corporation and Barnes Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Rexnord Corporation $1.92 billion 1.30 $74.10 million $0.66 36.26
Barnes Group $1.23 billion 2.76 $135.60 million $2.84 22.32

Barnes Group has higher revenue, but lower earnings than Rexnord Corporation. Barnes Group is trading at a lower price-to-earnings ratio than Rexnord Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Rexnord Corporation and Barnes Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rexnord Corporation 4.45% 12.03% 3.70%
Barnes Group 11.20% 12.44% 6.96%

Summary

Barnes Group beats Rexnord Corporation on 11 of the 16 factors compared between the two stocks.

Rexnord Corporation Company Profile

Rexnord Corporation is a multi-platform industrial company. The Company operates through two segments: Process & Motion Control platform, and Water Management platform. The Process & Motion Control platform designs, manufactures, markets and services a range of engineered mechanical components used within systems. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components and related value-added services. Its Process & Motion Control brands include Rexnord, Rex, Euroflex, Falk, FlatTop, Link-Belt, Thomas and Tollok. The Water Management platform designs, procures and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing and site works products. Its products are marketed and sold under various brand names, including Zurn, Wilkins and VAG.

Barnes Group Company Profile

Barnes Group Inc. is an industrial and aerospace manufacturer and service provider, serving a range of end markets and customers. The Company’s engineered products, industrial technologies, and solutions are used in applications that provide transportation, manufacturing, healthcare products and technology to the world. Its segments include Industrial and Aerospace. The Industrial segment is engaged in the manufacturing of precision parts, products and systems for applications serving a customer base in end-markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices and energy. The Industrial segment includes the Molding Solutions, Nitrogen Gas Products and Engineered Components business units. The Aerospace segment includes the original equipment manufacturer (OEM) business and the aftermarket business, which includes maintenance repair and overhaul services and the manufacture and delivery of aerospace aftermarket spare parts.

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