Head to Head Analysis: Acuity Brands (NYSE:AYI) versus Dialight (OTCMKTS:DIALF)

Acuity Brands (NYSE:AYI) and Dialight (OTCMKTS:DIALF) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Insider and Institutional Ownership

98.2% of Acuity Brands shares are owned by institutional investors. Comparatively, 31.8% of Dialight shares are owned by institutional investors. 1.5% of Acuity Brands shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Acuity Brands and Dialight’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acuity Brands	$3.95 billion	1.93	$346.00 million	$11.96	20.66
Dialight	N/A	N/A	N/A	$0.24	7.05

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

Dividends

Acuity Brands pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. Dialight pays an annual dividend of $0.14 per share and has a dividend yield of 8.7%. Acuity Brands pays out 5.0% of its earnings in the form of a dividend. Dialight pays out 61.1% 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. Acuity Brands has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Acuity Brands and Dialight, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity Brands	0	2	2	0	2.50
Dialight	0	0	0	0	N/A

Acuity Brands presently has a consensus target price of $289.25, indicating a potential upside of 17.07%. Given Acuity Brands’ higher possible upside, analysts plainly believe Acuity Brands is more favorable than Dialight.

Profitability

This table compares Acuity Brands and Dialight’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acuity Brands	9.81%	21.22%	12.57%
Dialight	N/A	N/A	N/A

Summary

Acuity Brands beats Dialight on 12 of the 13 factors compared between the two stocks.

About Acuity Brands

Acuity Brands, Inc. provides lighting, lighting controls, building management system, location-aware applications in the United States and internationally. The company operates in two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the A-Light, Aculux, American Electric Lighting, Cyclone, Dark to Light, eldoLED, Eureka, Gotham, Healthcare Lighting, Holophane, Hydrel, Indy, IOTA, Juno, Lithonia Lighting, Luminaire LED, Luminis, Mark Architectural Lighting, nLight, OPTOTRONIC, Peerless, RELOCWiring Solutions, and Sensor Switch. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturers, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management solutions, such as products for controlling heating, ventilation, air conditioning, lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems; and building management software that enhances building system management and automates labor intensive tasks. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. The company offers its products and solutions under the Atrius, Distech Controls, and KE2 Therm Solutions brands. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.

About Dialight

Dialight plc, together with its subsidiaries, primarily develops, manufactures, and supplies LED lighting solutions for use in hazardous and industrial applications in North America, Europe, the Middle East, Africa, and internationally. The company operates in two segments, Lighting, and Signals & Components. It offers high and low bays, and high outputs; conveyor, street, area, and flood lights; LED linear fixtures, such as low profile/top conduit linear, stainless steel linear, glass reinforced polyester linear, battery backup linear, and NSF linear; and wallpacks/bulkheads products. The company also provides lighting products for control systems and obstruction solutions. In addition, it offers signals and components, such as panel mount and circuit board indicators; and traffic, vehicle, and rail products. It serves heavy industry, pulp and paper, power generation, and oil and gas sectors. Dialight plc was founded in 1938 and is headquartered in London, the United Kingdom.