GEA Group (OTCMKTS:GEAGF) and Flowserve (NYSE:FLS) Critical Review

GEA Group (OTCMKTS:GEAGF) and Flowserve (NYSE:FLS) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, institutional ownership, valuation, dividends and analyst recommendations.

Volatility and Risk

GEA Group has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Flowserve has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for GEA Group and Flowserve, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GEA Group	0	2	0	1	2.67
Flowserve	0	3	9	0	2.75

Flowserve has a consensus price target of $88.80, suggesting a potential downside of 1.07%. Given Flowserve’s stronger consensus rating and higher probable upside, analysts plainly believe Flowserve is more favorable than GEA Group.

Insider and Institutional Ownership

93.9% of Flowserve shares are held by institutional investors. 0.7% of Flowserve shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares GEA Group and Flowserve”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GEA Group	$5.87 billion	N/A	$416.65 million	$2.32	29.98
Flowserve	$4.73 billion	2.41	$346.25 million	$2.62	34.26

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GEA Group	7.49%	18.50%	7.55%
Flowserve	7.32%	21.19%	8.39%

Summary

Flowserve beats GEA Group on 10 of the 14 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 Flowserve

Flowserve Corporation designs, manufactures, distributes, and services industrial flow management equipment in the United States, Canada, Mexico, Europe, the Middle East, Africa, and the Asia Pacific. It operates through Flowserve Pump Division (FPD) and Flow Control Division (FCD) segments. The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services; and equipment services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines and in the oil and gas production and process markets. The FCD segment provides engineered and industrial valve and automation systems, including isolation and control valves, actuation, controls, and related equipment; and equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities. This segment's products are used to control, direct, and manage the flow of liquids, gases, and multi-phase fluids. It primarily serves oil and gas, chemical and pharmaceuticals, power generation, and water management markets, as well as general industries, including mining and ore processing, pulp and paper, food and beverage, and other smaller applications. The company distributes its products through direct sales, distributors, and sales representatives. Flowserve Corporation was founded in 1790 and is headquartered in Irving, Texas.