Head-To-Head Comparison: ITT (NYSE:ITT) and Gates Industrial (NYSE:GTES)

Gates Industrial (NYSE:GTES) and ITT (NYSE:ITT) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Gates Industrial and ITT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gates Industrial	0	3	9	0	2.75
ITT	0	1	8	0	2.89

Gates Industrial presently has a consensus price target of $32.45, suggesting a potential upside of 25.24%. ITT has a consensus price target of $259.56, suggesting a potential upside of 28.79%. Given ITT’s stronger consensus rating and higher possible upside, analysts plainly believe ITT is more favorable than Gates Industrial.

Volatility and Risk

Gates Industrial has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, ITT has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.

Institutional and Insider Ownership

98.5% of Gates Industrial shares are held by institutional investors. Comparatively, 91.6% of ITT shares are held by institutional investors. 2.8% of Gates Industrial shares are held by company insiders. Comparatively, 0.9% of ITT shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Gates Industrial and ITT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gates Industrial	10.37%	10.11%	5.27%
ITT	8.90%	15.90%	7.74%

Valuation & Earnings

This table compares Gates Industrial and ITT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gates Industrial	$3.44 billion	1.91	$251.40 million	$1.41	18.38
ITT	$3.94 billion	4.57	$488.00 million	$5.10	39.52

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

Summary

ITT beats Gates Industrial on 9 of the 14 factors compared between the two stocks.

About Gates Industrial

Gates Industrial Corporation PLC designs and manufactures power transmission equipment. Its products serves harsh and hazardous industries such as agriculture, construction, manufacturing and energy, to everyday consumer applications such as printers, power washers, automatic doors and vacuum cleaners and virtually every form of transportation.

About ITT

ITT Inc., together with its subsidiaries, manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets in the United States and internationally. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, trucks, light- and heavy-duty commercial and military vehicles, buses, and trains. This segment sells its products under ITT Friction Technologies, KONI, Wolverine Advanced Materials, Axtone, Novitek, and GALT. brand names. The Industrial Process segment provides industrial pumps, valves, and plant optimization and remote monitoring systems and services; and aftermarket solutions, such as replacement parts and services. It serves various customers in industries, such as chemical, energy, mining, and other industrial process markets. This segment sells its products under Goulds Pumps, Bornemann, Engineered Valves, PRO Services, C'treat, i-ALERT, Rheinhütte Pumpen, and Habonim brand names. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized products for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and energy. This segment provides connector products, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of highly engineered actuation, flow control, energy absorption, environmental control, and composite component solutions for the aerospace, defense, and industrial markets under Cannon, VEAM, BIW Connector Systems, Aerospace Controls, Enidine, Compact Automation, Neo-Dyn Process Controls, Conoflow, and Micro-Mode brand names. The company was incorporated in 1920 and is headquartered in Stamford, Connecticut.