Regal Rexnord (NYSE:RRX) and ATS (NYSE:ATS) Head to Head Analysis

ATS (NYSE:ATS) and Regal Rexnord (NYSE:RRX) are both industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for ATS and Regal Rexnord, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATS	1	2	1	0	2.00
Regal Rexnord	0	1	7	0	2.88

ATS presently has a consensus price target of $42.00, indicating a potential upside of 39.21%. Regal Rexnord has a consensus price target of $191.29, indicating a potential upside of 13.23%. Given ATS’s higher probable upside, research analysts clearly believe ATS is more favorable than Regal Rexnord.

Profitability

This table compares ATS and Regal Rexnord’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ATS	6.11%	14.63%	5.90%
Regal Rexnord	-0.02%	9.16%	3.82%

Institutional and Insider Ownership

75.8% of ATS shares are held by institutional investors. Comparatively, 99.7% of Regal Rexnord shares are held by institutional investors. 0.8% of Regal Rexnord shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares ATS and Regal Rexnord”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATS	$2.29 billion	1.29	$143.62 million	$1.46	20.66
Regal Rexnord	$6.25 billion	1.80	-$57.40 million	($0.48)	-351.94

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

Volatility and Risk

ATS has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Regal Rexnord has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Summary

ATS beats Regal Rexnord on 8 of the 14 factors compared between the two stocks.

About ATS

ATS Corporation, together with its subsidiaries, provides automation solutions worldwide. The company is also involved in planning, designing, building, commissioning, and servicing automated manufacturing and assembly systems, including automation products and test solutions. In addition, it offers pre-automation services comprising discovery and analysis, concept development, simulation, and total cost of ownership modelling; post automation services, including training, process optimization, preventative maintenance, emergency and on-call support, spare parts, retooling, retrofits, and equipment relocation; and contract manufacturing services, as well as after sales and services. Further, the company provides engineering design, prototyping, process verification, specification writing, software and manufacturing process controls development, standard automation products/platforms, equipment design and build, third-party equipment qualification, procurement and integration, automation system installation, product line commissioning, validation, and documentation services. Additionally, it offers value engineering, supply chain management, and integration and manufacturing capabilities, as well as other automation products and solutions; and software and digital solutions comprising connected factory floor management systems to capture, analyze, and use real time machine performance data to troubleshoot, deliver process and product solutions, prevent equipment downtime, drive operational efficiency, and unlock performance for sustainable production improvements. ATS Corporation serves life sciences, transportation and mobility, consumer products, food and beverage, electronics, nuclear, packaging, warehousing and distribution, and energy markets. The company was formerly known as ATS Automation Tooling Systems Inc. and changed its name to ATS Corporation in November 2022. ATS Corporation was founded in 1978 and is headquartered in Cambridge, Canada.

About Regal Rexnord

Regal Rexnord Corporation manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. The Industrial Powertrain Solutions segment provides mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes, gear motors, clutches, brakes, special, and industrial powertrain components and solutions for food and beverage, bulk material handling, eCommerce/warehouse distribution, energy, mining, marine, agricultural machinery, turf and garden, and general industrial markets. The Power Efficiency Solutions segment offers AC and DC motors, electronic variable speed controls, and blowers for residential, commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, agriculture, conveying, and general commercial equipment markets. The Automation and Motion Control segment provides conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors, motion controls, automation transfer switches, and switchgear for industrial applications and automation systems for material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food and beverage processing, and other applications. The Industrial Systems segment offers integral motors, alternators, and aftermarket parts and kits for agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment markets. It sells its products directly to original equipment manufacturers, distributors, and end-users. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is based in Milwaukee, Wisconsin.