Analyzing Ayala (OTCMKTS:AYALY) & Griffon (NYSE:GFF)

Griffon (NYSE:GFF) and Ayala (OTCMKTS:AYALY) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

This is a summary of recent ratings and price targets for Griffon and Ayala, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Griffon	0	0	2	1	3.33
Ayala	0	0	0	0	N/A

Griffon presently has a consensus target price of $80.33, suggesting a potential upside of 22.14%. Given Griffon’s higher possible upside, equities analysts clearly believe Griffon is more favorable than Ayala.

Earnings and Valuation

This table compares Griffon and Ayala’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Griffon	$2.61 billion	1.25	$77.62 million	$3.79	17.35
Ayala	N/A	N/A	N/A	$54.52	0.19

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

Profitability

This table compares Griffon and Ayala’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Griffon	7.48%	90.02%	10.45%
Ayala	N/A	N/A	N/A

Institutional and Insider Ownership

73.2% of Griffon shares are owned by institutional investors. 16.1% of Griffon shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Griffon pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. Ayala pays an annual dividend of $5.84 per share and has a dividend yield of 55.6%. Griffon pays out 15.8% of its earnings in the form of a dividend. Ayala pays out 10.7% 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. Griffon has raised its dividend for 11 consecutive years. Ayala is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Griffon beats Ayala on 11 of the 14 factors compared between the two stocks.

About Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.

About Ayala

Ayala Corporation engages in the real estate and hotel businesses in the Philippines, Europe, Asia, and the United States. It develops, constructs, leases, and sells residential and commercial lots, as well as develops and sells leisure properties; manages land bank; operates hotels, cinema, and theaters; and provides construction and property management services. The company also provides saving and time deposits, corporate, consumer, mortgage, leasing, and agri business loans; deposit and cash management, asset management, securities brokerage, foreign exchange and capital markets investment, corporate finance and consulting, investment banking, internet banking, foreign exchange, and safety deposit services; and life, non-life, pre-need, and reinsurance services. In addition, it offers digital wireless communication, long distance communication, broadband internet, wireline voice and data communication, and local exchange carrier services; and designs, develops, operates, administers, and manages software applications and systems. Further, the company offers electronics manufacturing, and power semiconductor assembly and testing services; and generates power using renewable and conventional technologies. Additionally, the company manufactures, distributes, sells, repairs, and services passenger cars, commercial vehicles, and motorcycles; and provides water delivery, sewerage, sanitation, and distribution services, as well as pipe works, used water management, and management services, as well as offers venture capital for technologies and businesses; and onshore and offshore outsourcing, air-chartered, consultancy, healthcare, infrastructure, logistics, and education services. It also provides agriculture services. The company was founded in 1834 and is headquartered in Makati City, the Philippines.