Critical Survey: Gates Industrial (NYSE:GTES) vs. Alta Equipment Group (NYSE:ALTG)

Gates Industrial (NYSE:GTES) and Alta Equipment Group (NYSE:ALTG) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Institutional and Insider Ownership

98.5% of Gates Industrial shares are owned by institutional investors. Comparatively, 73.6% of Alta Equipment Group shares are owned by institutional investors. 2.7% of Gates Industrial shares are owned by company insiders. Comparatively, 19.9% of Alta Equipment Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Gates Industrial and Alta Equipment Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gates Industrial	0	6	6	0	2.50
Alta Equipment Group	2	2	1	2	2.43

Gates Industrial currently has a consensus price target of $27.09, suggesting a potential upside of 17.93%. Alta Equipment Group has a consensus price target of $11.00, suggesting a potential upside of 96.96%. Given Alta Equipment Group’s higher probable upside, analysts plainly believe Alta Equipment Group is more favorable than Gates Industrial.

Risk and Volatility

Gates Industrial has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Alta Equipment Group has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Profitability

This table compares Gates Industrial and Alta Equipment Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gates Industrial	6.93%	10.38%	5.22%
Alta Equipment Group	-4.34%	-175.61%	-5.41%

Valuation & Earnings

This table compares Gates Industrial and Alta Equipment Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gates Industrial	$3.41 billion	1.74	$194.90 million	$0.91	25.24
Alta Equipment Group	$1.88 billion	0.10	-$62.10 million	($2.51)	-2.23

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

Summary

Gates Industrial beats Alta Equipment Group on 11 of the 15 factors compared between the two stocks.

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.

About Alta Equipment Group

Alta Equipment Group Inc. owns and operates integrated equipment dealership platforms in the United States. It operates through three segments: Material Handling, Construction Equipment, and Master Distribution. The company operates a branch network that sells, rents, and provides parts and service support for various categories of specialized equipment, including lift trucks and other material handling equipment, heavy and compact earthmoving equipment, crushing and screening equipment, environmental processing equipment, cranes and aerial work platforms, paving and asphalt equipment, and other construction equipment and related products. It also offers repair and maintenance services for its equipment. In addition, the company designs and builds warehouses; provides automated equipment installation and system integration solutions; and distributes environmental processing equipment. It serves various manufacturing, food and beverage, automotive, municipal/government, education, pharmaceutical and medical, wholesale and retail distribution, construction, agriculture, road building, mining, recycling, and waste management sectors. Alta Equipment Group Inc. was founded in 1984 and is headquartered in Livonia, Michigan.