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Babcock (BW) vs Tennant Company (TNC)

Babcock and Tennant Company are both Specialty Industrial Machinery companies. Tennant Company is the larger, with a market value of $1.1B against $738.9M — 1.5× the size. Babcock has negative trailing earnings, so its P/E is not meaningful; Tennant Company trades at 62.8×. Babcock grew revenue faster over the last twelve months: 50.9% against −2.91%. Tennant Company has the higher net margin (1.50% vs −3.98%) and the lower return on invested capital (2.98% vs 134.7%). Across the 20 metrics below, Tennant Company leads on 12 and Babcock on 8.

Valuation

Metric BW TNC Specialty Industrial Machinery median
P/E n/m 62.84 28.39
P/S 0.79 0.91 2.70
P/B 11.48 2.06 3.02
Price to free cash flow 4.16 n/m 23.32
EV/EBITDA 15.43 14.03 15.39
EV/Sales 0.73 1.14 2.81
Earnings yield (3.90%) 1.59% 3.12%
Free cash flow yield 24.04% (0.13%) 3.24%

Profitability

Metric BW TNC Specialty Industrial Machinery median
Gross margin 19.74% 38.77% 35.90%
Operating margin 3.08% 3.20% 11.22%
Net margin (3.98%) 1.50% 7.80%
Free cash flow margin 18.95% (0.10%) 9.51%
Return on equity 26.41% 3.08% 10.50%
Return on assets (3.90%) 1.46% 4.60%
Return on invested capital 134.68% 2.98% 5.36%

Growth

Metric BW TNC Specialty Industrial Machinery median
Revenue growth (TTM) 50.93% (2.91%) 6.45%
EPS growth (last fiscal year) 41.46% (46.12%) 4.97%
Revenue growth, 5-year CAGR 0.74% 3.75% 8.31%
Net income growth, 5-year CAGR 0.00% 5.38% 5.04%

Health

Metric BW TNC Specialty Industrial Machinery median
Debt to equity 5.28 0.67 0.35
Current ratio 1.45 2.04 2.11
Net debt to EBITDA 2.60 1.32 1.32

Dividend

Metric BW TNC Specialty Industrial Machinery median
Dividend yield — 1.90% 1.10%
Payout ratio — 1.22 0.31

Size

Metric BW TNC Specialty Industrial Machinery median
Market cap 738.87m 1.13b 1.91b

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