Head-To-Head Analysis: Gates Industrial (NYSE:GTES) vs. Stratasys (NASDAQ:SSYS)

Gates Industrial (NYSE:GTES) and Stratasys (NASDAQ:SSYS) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Insider & Institutional Ownership

98.5% of Gates Industrial shares are held by institutional investors. Comparatively, 75.8% of Stratasys shares are held by institutional investors. 2.8% of Gates Industrial shares are held by company insiders. Comparatively, 4.3% of Stratasys shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Gates Industrial and Stratasys”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gates Industrial	$3.44 billion	1.91	$251.40 million	$1.41	18.43
Stratasys	$547.27 million	1.26	-$104.29 million	($1.34)	-5.97

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

Volatility & Risk

Gates Industrial has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Stratasys has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gates Industrial	10.37%	10.11%	5.27%
Stratasys	-21.05%	-1.77%	-1.38%

Analyst Recommendations

This is a breakdown of current recommendations for Gates Industrial and Stratasys, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gates Industrial	0	4	9	0	2.69
Stratasys	1	1	4	0	2.50

Gates Industrial currently has a consensus target price of $32.45, indicating a potential upside of 24.92%. Stratasys has a consensus target price of $12.33, indicating a potential upside of 54.17%. Given Stratasys’ higher possible upside, analysts plainly believe Stratasys is more favorable than Gates Industrial.

Summary

Gates Industrial beats Stratasys on 11 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 Stratasys

Stratasys Ltd. provides connected polymer-based 3D printing solutions. It offers range of 3D printing systems, which includes polyjet printer, Fused Deposition Modeling (FDM) printers, stereolithography printing systems, origin P3 printers, and selective absorption fusion printer for additive manufacturing, and tooling and rapid prototyping for various vertical markets, such as automotive, aerospace, consumer products and healthcare. The company provides consumable materials, including 3D printing materials comprising FDM, polyjet, and stereolithography materials for manufacturing applications, such as jigs and fixtures, investment casting, and injection mold or composite tooling applications; and other material. In addition, it offers software and services, which includes cloud, desktop and mobile technologies comprising GrabCAD, an additive manufacturing platform to manage production-scale operations; and GrabCAD Print, job programming software enables the unique features of 3D printing technologies, such as creating lightweight, structurally sound infills for FDM, and multi-material and color and material management for polyjet. The company also provides GrabCAD Shop including scheduling, remote monitoring, and analytics; GrabCAD Connect provides two-way SDK integration for third-party software applications; and GrabCAD Community, an online community of professional engineers, designers, manufacturers and students who share their practices through tutorials, discussion forums, design/print challenges, and 3D content. Further, it offers GrabCAD Shop, which simplifies 3D printing shop workflow; GrabCAD Streamline Software Development Kit (SDK) to support enterprise goals such as system connectivity, compliance, and workflow automation; and Grab CAD Software Partner program for independent software vendors. The company sells its products through a network of resellers and independent sales agents worldwide. Stratasys Ltd. is headquartered in Eden Prairie, Minnesota.