Comparing SMC (OTCMKTS:SMECF) and Crane (NYSE:CR)

Crane (NYSE:CR) and SMC (OTCMKTS:SMECF) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

75.1% of Crane shares are held by institutional investors. Comparatively, 29.9% of SMC shares are held by institutional investors. 2.4% of Crane shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Crane and SMC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crane	13.10%	24.45%	10.14%
SMC	N/A	N/A	N/A

Valuation and Earnings

This table compares Crane and SMC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crane	$2.13 billion	4.10	$401.10 million	$5.06	30.09
SMC	N/A	N/A	N/A	$1,427.82	0.26

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

Dividends

Crane pays an annual dividend of $0.92 per share and has a dividend yield of 0.6%. SMC pays an annual dividend of $143.72 per share and has a dividend yield of 38.5%. Crane pays out 18.2% of its earnings in the form of a dividend. SMC pays out 10.1% 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. SMC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and price targets for Crane and SMC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crane	0	2	4	0	2.67
SMC	0	0	0	0	0.00

Crane currently has a consensus price target of $174.80, indicating a potential upside of 14.80%. Given Crane’s stronger consensus rating and higher possible upside, equities analysts clearly believe Crane is more favorable than SMC.

Summary

Crane beats SMC on 10 of the 13 factors compared between the two stocks.

About Crane

Crane Company, together with its subsidiaries, manufactures and sells engineered industrial products in the United States, Canada, the United Kingdom, Continental Europe, and internationally. The company operates in three segments: Aerospace & Electronics, Process Flow Technologies, and Engineered Materials. The Aerospace & Electronics segment supplies critical components and systems, including original equipment and aftermarket parts for commercial aerospace, as well as the military aerospace, defense, and space markets. This segment also offers pressure sensors for aircraft engine control, aircraft braking systems for commercial aircraft and fighter jets, power conversion solutions for spacecraft, and lubrication systems. The Process Flow Technologies segment provides engineered fluid handling equipment for mission-critical applications. It offers process valves and related products, such as lined pipe, fittings and hoses, air-operated diaphragm and peristaltic pumps, instrumentation and sampling systems, valve positioning and control systems, and valve diagnostic and calibration systems; commercial valves; and pumps and systems. The Engineered Materials segment manufactures fiberglass-reinforced plastic panels and coils for use in the manufacturing of recreational vehicles, as well as in commercial and industrial building applications. This segment sells directly to RV, trailer, and truck manufacturers, as well as through distributors and retailers. The company provides its products and solutions to end markets, including commercial and military aerospace, defense, and space; chemical and pharmaceutical production; water and wastewater; non-residential and municipal construction; energy; and other general industrial and consumer-related applications. The company was formerly known as Crane Holdings, Co. Crane Company was founded in 1855 and is based in Stamford, Connecticut.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.