Financial Analysis: Orkla ASA (OTCMKTS:ORKLY) vs. Kawasaki Heavy Industries (OTCMKTS:KWHIY)

Kawasaki Heavy Industries (OTCMKTS:KWHIY) and Orkla ASA (OTCMKTS:ORKLY) are both mid-cap industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.

Volatility and Risk

Kawasaki Heavy Industries has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Orkla ASA has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Profitability

This table compares Kawasaki Heavy Industries and Orkla ASA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kawasaki Heavy Industries	3.17%	9.62%	2.26%
Orkla ASA	8.18%	12.95%	7.03%

Dividends

Kawasaki Heavy Industries pays an annual dividend of $0.25 per share and has a dividend yield of 1.4%. Orkla ASA pays an annual dividend of $0.39 per share and has a dividend yield of 4.5%. Kawasaki Heavy Industries pays out 25.0% of its earnings in the form of a dividend. Orkla ASA pays out 73.6% 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.

Valuation & Earnings

This table compares Kawasaki Heavy Industries and Orkla ASA”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kawasaki Heavy Industries	$12.81 billion	0.60	$175.11 million	$1.00	18.31
Orkla ASA	$6.43 billion	1.36	$492.58 million	$0.53	16.49

Orkla ASA has lower revenue, but higher earnings than Kawasaki Heavy Industries. Orkla ASA is trading at a lower price-to-earnings ratio than Kawasaki Heavy Industries, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kawasaki Heavy Industries and Orkla ASA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kawasaki Heavy Industries	0	0	0	1	4.00
Orkla ASA	0	0	0	0	0.00

Summary

Kawasaki Heavy Industries beats Orkla ASA on 7 of the 13 factors compared between the two stocks.

About Kawasaki Heavy Industries

Kawasaki Heavy Industries, Ltd. engages in aerospace systems, energy solution and marine engineering, precision machinery and robot, rolling stock, and motorcycle and engine businesses in Japan and internationally. It manufactures aircraft for the Japan ministry of defense; helicopters; and helicopter and jet engines for commercial aircrafts. The company also manufactures railway cars; a range of rolling stocks, including Shinkansen, electric cars, passenger coaches, freight cars, locomotives, diesel locomotives, and transit systems. In addition, it engages in the production and sale of energy-related machinery and systems, marine machinery and systems, industrial equipment, and environmental equipment. Further, the company manufactures and supplies motorcycles, off-road four wheelers, watercrafts, general-purpose gasoline engines, etc. Additionally, it manufactures and sells pumps, motors, valves, and various hydraulic machinery, as well as assembles hydraulic systems; and industrial robots for use in welding, assembly, handling, painting, and palletization for various industries, including automotive and electronics industries. The company was founded in 1878 and is headquartered in Tokyo, Japan.

About Orkla ASA

Orkla ASA engages in branded consumer goods, and industrial and financial investment businesses. The company offers branded products, including frozen pizza, ketchup, soups, sauces, bread toppings, and ready-to-eat meals through grocery channels, as well as food service, convenience stores, and petrol stations. It also provides confectionery, biscuit, and snack products; and spices, masalas, and various food products based on dried mixes. In addition, the company offers personal care, hygiene, laundry detergent, and cleaning products; dietary supplement, oral care, sport nutrition, and weight control products; wound care products and first aid equipment; painting tools and accessories; basic and wool garments; and professional cleaning products. It operates Gymgrossisten, Proteinfabrikken, Bodystore, and Fitnesstukku e-commerce portals for health and sports nutrition products; and restaurants. Additionally, the company supplies margarine and butter blends, bread and cake improvers and mixes, yeast, marzipan, and ice cream ingredients; produces and supplies hydro power to the Nordic power market; and develops and sells real estate properties. It offers its food products under the Grandiosa, TORO, Stabburet, Felix, Paulúns, Fun Light, Abba, Beauvais, Kalles, Den Gamle Fabrik, Hamé, and Vitana brands; confectionery and snacks under the KiMs, Nidar, Stratos, Sætre, Göteborgs Kex, OLW, Panda, Laima, Selga, Taffel, Kalev, and Nói Síríus brands; home and personal care products under Zalo, OMO, Blenda, Jif, Define, Solidox, Dr Greve, Lano, and Bliw; health produtcs under Möller's, Jordan, Vitalab, OSL, Cederroth First Aid, Salvequick, Livol, Nutrilett, Maxim, Collett, Solidox and CuraMed brands; and food ingredients under the Odense, Mors Hjemmebakte, KronJäst, Bakkedal, and NATURLI brands. It has operations in Norway, Sweden, Denmark, Finland, Iceland, the Baltics, rest of Europe, and internationally. The company was founded in 1918 and is headquartered in Oslo, Norway.