In today’s rapidly evolving industrial landscape, companies like Hillenbrand, Inc. (HI) and ATS Corporation (ATS) stand out due to their innovative approaches within the machinery sector. Both firms share similarities in their operational focus on automation and machinery solutions, yet they adopt distinct strategies to capture market opportunities. This article will delve into their comparative strengths and challenges to help you determine which company might be the most intriguing addition to your investment portfolio.
Table of contents
Company Overview
Hillenbrand, Inc. Overview
Hillenbrand, Inc. (ticker: HI) is a diversified industrial company that operates globally, primarily in the machinery sector. Founded in 1906 and headquartered in Batesville, Indiana, Hillenbrand has a market capitalization of approximately 2.23B. The company is structured into three main segments: Advanced Process Solutions, Molding Technology Solutions, and Batesville, each offering specialized machinery and services across various industries, including food, pharmaceuticals, and automotive. Hillenbrand’s strategic focus on innovation and customer service positions it as a key player in the industrial machinery landscape, reflecting a commitment to operational excellence and market leadership.
ATS Corporation Overview
ATS Corporation (ticker: ATS), established in 1978 and based in Cambridge, Canada, is a prominent provider of automation solutions with a current market cap of around 2.51B. The company specializes in the design and implementation of automated manufacturing and assembly systems, offering a comprehensive suite of services from planning and commissioning to ongoing support and optimization. ATS serves a wide range of industries, including life sciences, food and beverage, and electronics, emphasizing its role as a catalyst for operational efficiency and sustainable production improvements.
Key Similarities and Differences
Both Hillenbrand and ATS operate within the industrial machinery sector, emphasizing advanced technologies and customer-focused solutions. However, Hillenbrand diversifies its offerings across multiple segments, including funeral services, while ATS concentrates solely on automation solutions. This distinction reflects their respective strategies—Hillenbrand’s broad industrial approach versus ATS’s specialized automation focus.
Income Statement Comparison
The following table presents a comparative income statement for Hillenbrand, Inc. (HI) and ATS Corporation (ATS) for the most recent fiscal year, allowing investors to analyze key financial metrics.
| Metric | Hillenbrand, Inc. (HI) | ATS Corporation (ATS) |
|---|---|---|
| Revenue | 2.67B | 2.53B |
| EBITDA | 230.6M | 168.0M |
| EBIT | 92.1M | 15.3M |
| Net Income | 43.1M | -28.0M |
| EPS | 0.74 | -0.29 |
Interpretation of Income Statement
In the latest fiscal year, Hillenbrand, Inc. reported a revenue decrease from 3.18B to 2.67B, indicating a challenging market environment, while its net income notably declined to 43.1M from a previous loss. Conversely, ATS Corporation saw a revenue drop from 3.03B to 2.53B, resulting in a net loss of 28.0M. Both companies experienced pressure on margins, yet Hillenbrand managed to maintain positive EBITDA, while ATS’s profitability remained elusive, highlighting a stark disparity in performance. Overall, both companies face significant challenges, warranting caution for potential investors.
Financial Ratios Comparison
The following table provides a comparative analysis of the most recent financial metrics for Company A (Hillenbrand, Inc.) and Company B (ATS Corporation).
| Metric | Hillenbrand, Inc. | ATS Corporation |
|---|---|---|
| ROE | 3.66% | -1.64% |
| ROIC | -32.60% | 0.09% |
| P/E | 36.69 | -125.28 |
| P/B | 1.34 | 2.06 |
| Current Ratio | 1.22 | 1.69 |
| Quick Ratio | 0.88 | 1.41 |
| D/E | 1.12 | 0.99 |
| Debt-to-Assets | 35.86% | 36.79% |
| Interest Coverage | 0.55 | 0.09 |
| Asset Turnover | 0.60 | 0.55 |
| Fixed Asset Turnover | 7.80 | 5.66 |
| Payout ratio | 121.69% | 0% |
| Dividend yield | 3.32% | 0% |
Interpretation of Financial Ratios
Hillenbrand demonstrates stronger profitability metrics with a positive ROE and a healthy dividend yield, though its high debt ratio is concerning. Conversely, ATS shows negative ROE and P/E ratios, indicating financial difficulties. Its current and quick ratios are decent, suggesting it can cover short-term obligations, but the low interest coverage ratio raises red flags about its ability to meet interest payments. Overall, Hillenbrand appears to have a more favorable outlook, while ATS might pose significant risks for investors.
Dividend and Shareholder Returns
Hillenbrand, Inc. (HI) demonstrates a commitment to shareholder returns through a dividend yield of 3.32% and a payout ratio of 121.69%. This suggests reliance on cash flow for sustainable distributions, raising concerns about the sustainability of these dividends given its negative net income. In contrast, ATS Corporation (ATS) does not pay dividends, likely prioritizing reinvestment for growth during its current development phase. However, it engages in share buybacks, indicating a focus on enhancing shareholder value. Both strategies present unique risks, and careful monitoring of financial health is essential for long-term value creation.
Strategic Positioning
Hillenbrand, Inc. (HI) holds a market cap of $2.23B and operates across diverse segments in the industrial machinery sector, while ATS Corporation (ATS) has a slightly larger market cap of $2.51B, focusing on automation solutions. Both companies face competitive pressure from technological advancements and shifting market demands. Hillenbrand’s established presence in funeral services products and automation machinery positions it uniquely, whereas ATS’s comprehensive automation solutions provide significant benchmarking opportunities against competitors. As the industry evolves, both firms must navigate potential disruptions effectively.
Stock Comparison
In this section, I will analyze the weekly stock price movements for Hillenbrand, Inc. (HI) and ATS Corporation (ATS) over the past year, highlighting key price dynamics and trading patterns.
Trend Analysis
Hillenbrand, Inc. (HI) Over the past year, HI has experienced a price change of -29.86%, indicating a bearish trend. The stock has shown notable volatility, with a standard deviation of 9.44. The highest price reached was 50.29, while the lowest was 18.75, suggesting a significant range in trading activity. The trend shows acceleration in its decline, which may concern investors looking for stability.
ATS Corporation (ATS) ATS has seen a price change of -37.47% over the last year, categorizing it also as a bearish trend. The volatility is slightly lower, with a standard deviation of 4.44, indicating less price fluctuation compared to HI. The stock hit a high of 43.82 and a low of 23.50. However, the trend has shown signs of deceleration recently, which could imply a potential stabilization or further decline in the future.
In summary, both stocks are currently in bearish trends, with HI exhibiting greater volatility than ATS. Investors should consider these dynamics carefully when making portfolio decisions.
Analyst Opinions
Recent analyst recommendations for Hillenbrand, Inc. (HI) indicate a favorable outlook, with a B+ rating reflecting strong financial metrics, particularly in return on assets and discounted cash flow. Analysts suggest a “buy” due to its robust growth potential. In contrast, ATS Corporation (ATS) has received a C rating, with analysts expressing caution and recommending a “hold” as it struggles with lower scores in key financial areas. The consensus for HI is a “buy,” while ATS is viewed more neutrally.
Stock Grades
In the current market landscape, it’s crucial to consider the latest stock ratings from reputable grading companies. Here are the grades for two companies: Hillenbrand, Inc. (HI) and ATS Corporation (ATS).
Hillenbrand, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| DA Davidson | maintain | Neutral | 2025-11-20 |
| DA Davidson | maintain | Neutral | 2025-10-16 |
| CJS Securities | downgrade | Market Perform | 2025-10-16 |
| Keybanc | downgrade | Sector Weight | 2025-05-08 |
| DA Davidson | maintain | Neutral | 2025-05-01 |
| DA Davidson | maintain | Neutral | 2024-11-15 |
| Keybanc | maintain | Overweight | 2024-11-14 |
| DA Davidson | downgrade | Neutral | 2024-08-12 |
| DA Davidson | maintain | Buy | 2021-02-08 |
| DA Davidson | maintain | Buy | 2021-02-07 |
ATS Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | maintain | Neutral | 2024-08-13 |
| Goldman Sachs | maintain | Sell | 2024-08-13 |
| JP Morgan | maintain | Neutral | 2024-05-24 |
Overall, Hillenbrand, Inc. has seen a trend of downgrades, particularly from CJS Securities and Keybanc, reflecting a cautious outlook. In contrast, ATS Corporation maintains a neutral stance from both JP Morgan and Goldman Sachs, indicating a stable but cautious market sentiment. It’s essential to keep these trends in mind as they may impact future investment decisions.
Target Prices
The current consensus target prices for Hillenbrand, Inc. (HI) and ATS Corporation (ATS) are as follows:
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Hillenbrand, Inc. | 32 | 32 | 32 |
| ATS Corporation | 34 | 34 | 34 |
Analysts expect Hillenbrand, Inc. to reach a target price of $32, slightly above its current price of $31.67. Similarly, ATS Corporation’s target price of $34 indicates a potential upside from its current price of $25.62. Both companies show positive analyst sentiment.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Hillenbrand, Inc. (HI) and ATS Corporation (ATS) based on the most recent data.
| Criterion | Hillenbrand, Inc. (HI) | ATS Corporation (ATS) |
|---|---|---|
| Diversification | High (3 segments) | Moderate (automation focus) |
| Profitability | Low (net margin: 1.95%) | Moderate (net margin: 6.39%) |
| Innovation | Moderate (engineering focus) | High (automation solutions) |
| Global presence | Strong (international operations) | Moderate (international but focused) |
| Market Share | Moderate in machinery | Growing in automation |
| Debt level | Moderate (debt to equity: 1.12) | Moderate (debt to equity: 0.77) |
Key takeaways: Hillenbrand shows strong diversification with multiple segments, while ATS has a higher net profit margin and strong innovation in automation solutions. Both companies maintain a moderate debt level, indicating manageable risk.
Risk Analysis
The following table summarizes the key risks associated with Hillenbrand, Inc. (HI) and ATS Corporation (ATS).
| Metric | Hillenbrand, Inc. (HI) | ATS Corporation (ATS) |
|---|---|---|
| Market Risk | High volatility with a beta of 1.403 | Moderate volatility with a beta of 1.313 |
| Regulatory Risk | Subject to regulatory scrutiny in multiple sectors | Potential impacts from automation regulations |
| Operational Risk | Challenges in maintaining profit margins | Dependency on manufacturing efficiency |
| Environmental Risk | Compliance with environmental regulations | Risks related to sustainability practices |
| Geopolitical Risk | Exposure to international markets increases risk | Global supply chain vulnerabilities |
In summary, both companies face significant market and operational risks. Hillenbrand, Inc. is notably exposed to regulatory scrutiny, while ATS Corporation may be affected by evolving automation regulations. Investors should carefully weigh these factors in their decision-making process.
Which one to choose?
When comparing Hillenbrand, Inc. (HI) and ATS Corporation (ATS), several key metrics stand out. Hillenbrand exhibits a solid gross profit margin of 33.7% and a net profit margin of 1.9%, while ATS shows lower margins with a gross profit of 25.5% and a net loss of -1.1%. In terms of financial health, HI boasts a better rating of B+ compared to ATS’s C, indicating stronger fundamentals. The stock trends for both companies are bearish, with HI down 29.9% and ATS down 37.5% over the last year. Analysts generally favor HI, given its stronger return on equity and assets.
For growth-oriented investors, HI appears more attractive due to its higher profitability ratios. Conversely, conservative investors focusing on stability may find ATS less appealing due to its lower ratings and financial performance.
However, both companies face risks related to market dependence and competition in their respective sectors.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Hillenbrand, Inc. and ATS Corporation to enhance your investment decisions:
