Analyzing DXP Enterprises (NASDAQ:DXPE) and Middleby (NASDAQ:MIDD)

DXP Enterprises (NASDAQ:DXPE) and Middleby (NASDAQ:MIDD) are both mid-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for DXP Enterprises and Middleby, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DXP Enterprises	0	2	2	0	2.50
Middleby	1	2	6	0	2.56

DXP Enterprises presently has a consensus price target of $154.00, indicating a potential upside of 6.80%. Middleby has a consensus price target of $189.71, indicating a potential upside of 28.11%. Given Middleby’s stronger consensus rating and higher probable upside, analysts clearly believe Middleby is more favorable than DXP Enterprises.

Volatility & Risk

DXP Enterprises has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Middleby has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Institutional and Insider Ownership

74.8% of DXP Enterprises shares are owned by institutional investors. Comparatively, 98.6% of Middleby shares are owned by institutional investors. 22.7% of DXP Enterprises shares are owned by company insiders. Comparatively, 9.7% of Middleby shares are owned 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 & Valuation

This table compares DXP Enterprises and Middleby”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DXP Enterprises	$2.02 billion	1.11	$88.68 million	$5.35	26.95
Middleby	$3.20 billion	2.09	-$277.73 million	($8.48)	-17.46

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

Profitability

This table compares DXP Enterprises and Middleby’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DXP Enterprises	4.27%	18.16%	5.70%
Middleby	-11.46%	15.94%	7.34%

Summary

Middleby beats DXP Enterprises on 8 of the 14 factors compared between the two stocks.

About DXP Enterprises

DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory vinventory optimization and management, storeroom management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages; remanufactures pumps; and manufactures branded private label pumps. DXP Enterprises, Inc. was founded in 1908 and is based in Houston, Texas.

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.