Gates Industrial (NYSE:GTES – Get Free Report) and Art’s-Way Manufacturing (NASDAQ:ARTW – Get Free Report) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.
Institutional and Insider Ownership
98.5% of Gates Industrial shares are owned by institutional investors. Comparatively, 2.9% of Art’s-Way Manufacturing shares are owned by institutional investors. 2.8% of Gates Industrial shares are owned by company insiders. Comparatively, 51.5% of Art’s-Way Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Gates Industrial and Art’s-Way Manufacturing’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% |
| Art’s-Way Manufacturing | -0.08% | -0.16% | -0.10% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gates Industrial | 0 | 4 | 9 | 0 | 2.69 |
| Art’s-Way Manufacturing | 1 | 0 | 0 | 0 | 1.00 |
Gates Industrial presently has a consensus target price of $32.45, indicating a potential upside of 30.32%. Given Gates Industrial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Gates Industrial is more favorable than Art’s-Way Manufacturing.
Volatility & Risk
Gates Industrial has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Art’s-Way Manufacturing has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.
Earnings & Valuation
This table compares Gates Industrial and Art’s-Way Manufacturing”s gross 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 | 1.83 | $251.40 million | $1.41 | 17.66 |
| Art’s-Way Manufacturing | $22.98 million | 0.68 | $1.03 million | ($0.01) | -300.00 |
Gates Industrial has higher revenue and earnings than Art’s-Way Manufacturing. Art’s-Way Manufacturing 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
Gates Industrial beats Art’s-Way Manufacturing on 13 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 Art’s-Way Manufacturing
Art’s-Way Manufacturing Co., Inc. manufactures and distributes farm equipment products. It operates through the Agricultural Products, and Modular Buildings segments. The Agricultural Products segment manufactures a variety of specialized farm machinery under its own label including portable and stationary animal feed processing equipment and related attachments used to mill and mix feed grains into custom animal feed rations, a line of forage equipment consisting of forage boxes, bale processors, running gear, and dump boxes, a line of manure spreaders, sugar beet harvesting equipment, and a line of dirt work equipment. The Modular Buildings segment produces and sells modular buildings, which are custom designed to meet the specific research needs of its customers. It also provides services relating to the design, manufacturing, delivery, installation and renting of the building units that it produces. The company was founded by Arthur Luscombe in 1956 and is headquartered in Armstrong, IA.
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