Critical Contrast: GEA Group (OTCMKTS:GEAGF) and Middleby (NASDAQ:MIDD)

GEA Group (OTCMKTS:GEAGF) and Middleby (NASDAQ:MIDD) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Volatility and Risk

GEA Group has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500. Comparatively, Middleby has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GEA Group	0	0	0	1	4.00
Middleby	1	2	6	0	2.56

Middleby has a consensus price target of $189.71, indicating a potential upside of 34.05%. Given Middleby’s higher probable upside, analysts clearly believe Middleby is more favorable than GEA Group.

Insider and Institutional Ownership

98.6% of Middleby shares are held by institutional investors. 9.7% of Middleby shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares GEA Group and Middleby”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GEA Group	$6.22 billion	1.96	$468.31 million	$2.32	32.18
Middleby	$3.31 billion	1.93	-$277.73 million	($8.48)	-16.69

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GEA Group	7.49%	18.50%	7.55%
Middleby	-11.46%	15.94%	7.34%

Summary

GEA Group beats Middleby on 10 of the 15 factors compared between the two stocks.

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.

About Middleby

The Middleby Corporation designs, markets, manufactures, distributes, and services foodservice, food processing, and residential kitchen equipment worldwide. Its Commercial Foodservice Equipment Group segment offers conveyor, combi, convection, baking, proofing, deck, speed cooking, and hydrovection ovens; ranges, fryers, and rethermalizers; steam cooking, food warming, catering, induction cooking, and countertop cooking equipment; heated cabinets, charbroilers, ventless cooking systems, kitchen ventilation, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, cold rooms, ice machines, and freezers; soft serve ice cream, coffee and beverage dispensing, home and professional craft brewing equipment; and fry dispensers, bottle filling and canning equipment, IoT solutions, and controls development and manufacturing. The company's Food Processing Equipment Group segment provides batch, baking, proofing, conveyor belt, and continuous processing ovens; frying and automated thermal processing systems; tumblers, massagers, grinders, slicers, reduction and emulsion systems, mixers, and blenders; battering, breading, and seeding equipment; water cutting systems, food presses, food suspension equipment, filling and depositing solutions, and forming equipment; and automated washing systems, auto-guided vehicles, food safety, food handling, freezing, and defrosting and packaging equipment. Its Residential Kitchen Equipment Group segment offers kitchen equipment comprising cookers, stoves, cooktops, microwaves, ovens, refrigerators, dishwashers, undercounter refrigeration, wine cellars, ice machines, beer dispensers, mixers, rotisseries, and ventilation and outdoor cooking equipment. The company was formerly known as Middleby Marshall Oven Company and changed its name to The Middleby Corporation in 1985. The company was founded in 1888 and is based in Elgin, Illinois.