Head-To-Head Survey: Applied Industrial Technologies (NYSE:AIT) and Gates Industrial (NYSE:GTES)

Gates Industrial (NYSE:GTES) and Applied Industrial Technologies (NYSE:AIT) are both mid-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Gates Industrial and Applied Industrial Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gates Industrial	0	4	7	1	2.75
Applied Industrial Technologies	0	1	7	0	2.88

Gates Industrial currently has a consensus target price of $28.18, indicating a potential upside of 9.43%. Applied Industrial Technologies has a consensus target price of $285.00, indicating a potential upside of 10.35%. Given Applied Industrial Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Applied Industrial Technologies is more favorable than Gates Industrial.

Profitability

This table compares Gates Industrial and Applied Industrial Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gates Industrial	5.98%	10.17%	5.02%
Applied Industrial Technologies	8.61%	21.78%	12.74%

Institutional & Insider Ownership

98.5% of Gates Industrial shares are owned by institutional investors. Comparatively, 93.5% of Applied Industrial Technologies shares are owned by institutional investors. 2.7% of Gates Industrial shares are owned by company insiders. Comparatively, 1.6% of Applied Industrial Technologies 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.

Risk and Volatility

Gates Industrial has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Applied Industrial Technologies has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Earnings & Valuation

This table compares Gates Industrial and Applied Industrial Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gates Industrial	$3.39 billion	1.96	$194.90 million	$0.78	33.02
Applied Industrial Technologies	$4.56 billion	2.14	$392.99 million	$10.12	25.52

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.

Summary

Applied Industrial Technologies beats Gates Industrial on 9 of the 14 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 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.