Financial Review: GEA Group (OTCMKTS:GEAGF) & Twin Disc (NASDAQ:TWIN)

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

Analyst Ratings

This is a summary of current recommendations and price targets for GEA Group and Twin Disc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GEA Group	0	0	0	2	4.00
Twin Disc	0	2	1	0	2.33

Twin Disc has a consensus target price of $30.00, indicating a potential upside of 5.26%. Given Twin Disc’s higher possible upside, analysts clearly believe Twin Disc is more favorable than GEA Group.

Insider and Institutional Ownership

65.2% of Twin Disc shares are held by institutional investors. 21.1% of Twin Disc shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares GEA Group and Twin Disc”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	1.85	$468.41 million	$2.42	29.12
Twin Disc	$381.27 million	1.09	$27.08 million	$2.38	11.97

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

Volatility & Risk

GEA Group has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Twin Disc has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GEA Group	7.70%	18.21%	7.52%
Twin Disc	9.06%	6.78%	3.31%

Summary

GEA Group beats Twin Disc on 9 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 Twin Disc

Twin Disc, Incorporated engages in the design, manufacture, and sale of marine and heavy duty off-highway power transmission equipment in the United States, the Netherlands, China, Australia, Italy, and internationally. The company operates in two segments, Manufacturing and Distribution. Its principal products include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. The company also provides third-party manufactured products. It sells its products through a direct sales force and distributor network to customers primarily in the pleasure craft, commercial marine, patrol, and military marine markets, as well as in the energy and natural resources, government, agriculture, recycling, construction, oil and gas, and industrial markets. The company was incorporated in 1918 and is headquartered in Milwaukee, Wisconsin.