Applied Industrial Technologies (NYSE:AIT – Get Free Report) and Gates Industrial (NYSE:GTES – Get Free Report) are both mid-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.
Volatility & Risk
Applied Industrial Technologies has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Gates Industrial has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Applied Industrial Technologies and Gates Industrial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Applied Industrial Technologies | 0 | 1 | 7 | 0 | 2.88 |
| Gates Industrial | 0 | 4 | 7 | 1 | 2.75 |
Valuation & Earnings
This table compares Applied Industrial Technologies and Gates Industrial”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Applied Industrial Technologies | $4.56 billion | 2.14 | $392.99 million | $10.12 | 25.52 |
| Gates Industrial | $3.41 billion | 1.95 | $194.90 million | $0.78 | 33.02 |
Applied Industrial Technologies has higher revenue and earnings than Gates Industrial. Applied Industrial Technologies is trading at a lower price-to-earnings ratio than Gates Industrial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Applied Industrial Technologies and Gates Industrial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Applied Industrial Technologies | 8.61% | 21.78% | 12.74% |
| Gates Industrial | 5.98% | 10.17% | 5.02% |
Insider & Institutional Ownership
93.5% of Applied Industrial Technologies shares are held by institutional investors. Comparatively, 98.5% of Gates Industrial shares are held by institutional investors. 1.6% of Applied Industrial Technologies shares are held by company insiders. Comparatively, 2.7% of Gates Industrial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Summary
Applied Industrial Technologies beats Gates Industrial on 9 of the 14 factors compared between the two stocks.
About Applied Industrial Technologies
Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. It operates in two segments, Service Center Based Distribution, and Engineered Solutions. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, automation solutions, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, filtration supplies, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company provides technical support services; engages in the distribution of fluid power and industrial flow control products; advanced automation solutions, including machine vision, robotics, motion control, and smart technologies. It distributes industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as government entities. The company was formerly known as Bearings, Inc. and changed its to name to Applied Industrial Technologies, Inc. in 1997. The company was founded in 1923 and is headquartered in Cleveland, Ohio.
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.
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