Gates Industrial (NYSE:GTES) versus GEA Group (OTCMKTS:GEAGF) Critical Contrast

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

Analyst Recommendations

This is a summary of current ratings and price targets for Gates Industrial and GEA Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gates Industrial	0	4	7	0	2.64
GEA Group	0	0	0	1	4.00

Gates Industrial presently has a consensus price target of $31.00, indicating a potential upside of 10.30%. Given Gates Industrial’s higher possible upside, research analysts clearly believe Gates Industrial is more favorable than GEA Group.

Risk and Volatility

Gates Industrial has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, GEA Group has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500.

Institutional & Insider Ownership

98.5% of Gates Industrial shares are owned by institutional investors. 2.8% of Gates Industrial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gates Industrial	7.23%	10.00%	5.15%
GEA Group	7.49%	18.50%	7.55%

Valuation & Earnings

This table compares Gates Industrial and GEA Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gates Industrial	$3.44 billion	2.07	$251.40 million	$0.96	29.28
GEA Group	$6.22 billion	1.66	$468.31 million	$2.32	27.30

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

Summary

GEA Group beats Gates Industrial on 8 of the 15 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 GEA Group

GEA Group Aktiengesellschaft engages in the development and production of systems and components to the food, beverage, and pharmaceutical industries. It operates through Separation & Flow Technologies, Liquid & Power Technologies, Food & Health Technologies, Farm Technologies, and Heating & Refrigeration Technologies segments. The Separation & Flow Technologies segment manufacture process-related components and machinery including notably separators, decanters, homogenizers, valves, and pumps. The Liquid & Power Technologies segment offers brewing systems, liquid processing and filling, concentration, precision fermentation, crystallization, purification, drying, powder handling, and packaging, as well as systems for emission control for dairy, beverage, food, chemical, and other industries. The Food & Health Technologies segment engages in the preparation, marination, and processing of meat, poultry, seafood, and vegan products, pasta and confectionery products, baking, slicing, packaging, and frozen food processing for food processing industry; and provides tablet presses for pharmaceutical industry. The Farm Technologies segment offers customer solution for milk production and livestock farming, which includes automatic milking and feeding system, conventional milking solutions, manure handling, and digital herd management tool. The Heating & Refrigeration Technologies segment provides energy solution in the field of industrial refrigeration and heating for an array of industries including food, beverage, dairy, and oil and gas. The company was formerly known as mg technologies ag and changed its name to GEA Group Aktiengesellschaft in 2005. GEA Group Aktiengesellschaft was founded in 1881 and is headquartered in Düsseldorf, Germany.