Snap-On (NYSE: SNA) and Manitowoc Food Service (NYSE:WBT) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Snap-On and Manitowoc Food Service, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Snap-On 0 2 5 0 2.71
Manitowoc Food Service 0 2 2 0 2.50

Snap-On presently has a consensus price target of $197.00, suggesting a potential upside of 31.93%. Manitowoc Food Service has a consensus price target of $21.25, suggesting a potential downside of 5.60%. Given Snap-On’s stronger consensus rating and higher possible upside, analysts clearly believe Snap-On is more favorable than Manitowoc Food Service.

Volatility & Risk

Snap-On has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Manitowoc Food Service has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500.

Institutional and Insider Ownership

93.1% of Snap-On shares are owned by institutional investors. Comparatively, 87.9% of Manitowoc Food Service shares are owned by institutional investors. 3.7% of Snap-On shares are owned by insiders. Comparatively, 0.7% of Manitowoc Food Service shares are owned 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.

Dividends

Snap-On pays an annual dividend of $2.84 per share and has a dividend yield of 1.9%. Manitowoc Food Service does not pay a dividend. Snap-On pays out 29.3% of its earnings in the form of a dividend. Manitowoc Food Service has raised its dividend for 7 consecutive years.

Profitability

This table compares Snap-On and Manitowoc Food Service’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Snap-On 16.22% 20.90% 11.89%
Manitowoc Food Service 5.57% -280.03% 5.02%

Valuation & Earnings

This table compares Snap-On and Manitowoc Food Service’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Snap-On $3.83 billion 2.25 $971.00 million $9.68 15.43
Manitowoc Food Service $1.46 billion 2.14 $265.30 million $0.58 38.81

Snap-On has higher revenue and earnings than Manitowoc Food Service. Snap-On is trading at a lower price-to-earnings ratio than Manitowoc Food Service, indicating that it is currently the more affordable of the two stocks.

Summary

Snap-On beats Manitowoc Food Service on 13 of the 17 factors compared between the two stocks.

Snap-On Company Profile

Snap-on Incorporated is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. The Company’s segments include the Commercial & Industrial Group, the Snap-on Tools Group, the Repair Systems & Information Group, and Financial Services. The Commercial & Industrial Group consists of business operations serving a range of industrial and commercial customers, including customers in the aerospace, natural resources, government, power generation, transportation and technical education markets. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians. The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers, primarily owners and managers of independent repair shops and original equipment manufacturer (OEM) dealership service and repair shops. Financial Services consists of the business operations of its finance subsidiaries.

Manitowoc Food Service Company Profile

Welbilt, Inc., formerly Manitowoc Foodservice, Inc., is a commercial foodservice equipment company. The Company designs, manufactures and supplies food and beverage equipment for the global commercial foodservice market, offering customers operator and patron insights, kitchen solutions, culinary expertise, and implementation support and service. It operates through three segments: Americas, EMEA and APAC. The Americas segment includes the United States, Canada and Latin America. The EMEA segment consists of markets in Europe, Middle East and Africa, including Russia and the commonwealth of independent states. The APAC segment consists of markets in China, Singapore, Australia, India, Malaysia, Indonesia, Thailand and the Philippines. It supplies foodservice equipment to commercial and institutional foodservice operators. Its brands include Cleveland, Convotherm, Delfield, fitKitchen, Frymaster, Garland, Kolpak, Lincoln, Manitowoc Ice, Merco, Merrychef and Multiplex.

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