Ingersoll-Rand (NYSE:IR) and Gates Industrial (NYSE:GTES) are both mid-cap industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Profitability

This table compares Ingersoll-Rand and Gates Industrial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ingersoll-Rand 6.49% 8.86% 3.47%
Gates Industrial 22.35% 8.98% 3.61%

Earnings and Valuation

This table compares Ingersoll-Rand and Gates Industrial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ingersoll-Rand $2.45 billion 1.95 $159.10 million $0.76 30.63
Gates Industrial $3.09 billion 0.68 $690.10 million $0.91 7.93

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ingersoll-Rand and Gates Industrial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingersoll-Rand 0 7 9 0 2.56
Gates Industrial 0 4 2 0 2.33

Ingersoll-Rand presently has a consensus target price of $118.00, indicating a potential upside of 406.87%. Gates Industrial has a consensus target price of $13.00, indicating a potential upside of 80.06%. Given Ingersoll-Rand’s stronger consensus rating and higher possible upside, analysts plainly believe Ingersoll-Rand is more favorable than Gates Industrial.

Risk and Volatility

Ingersoll-Rand has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Gates Industrial has a beta of 2.12, suggesting that its share price is 112% more volatile than the S&P 500.

Summary

Gates Industrial beats Ingersoll-Rand on 7 of the 12 factors compared between the two stocks.

About Ingersoll-Rand

Ingersoll-Rand Plc designs, manufactures, sells, and services industrial and commercial products. The company operates through Climate and Industrial segments. The Climate segment offers air conditioners, exchangers, and handlers; airside and terminal devices; auxiliary power units; chillers; coils and condensers; gensets; furnaces; heat pumps; home automation; humidifiers; hybrid and non-diesel transport refrigeration, and ice energy storage solutions; indoor air quality; industrial refrigeration; motor replacements; refrigerant reclamation; thermostats/controls; transport heater products; and water source heat pumps. It also provides building management; bus, rail, and multi-pipe hvac; control; container, cryogenic, diesel-powered, industrial, rail, self-powered truck, trailer, and vehicle-powered truck refrigeration; ductless; geothermal; package heating and cooling; temporary heating and cooling; and unitary systems, as well as aftermarket and OEM parts and supplies. In addition, this segment offers energy and facility management, installation and performance contracting, repair and maintenance, and rental services. The Industrial segment provides air treatment and separation, engine starting, ergonomic material handling, fluid handling, precision fastening, and mobile golf information systems; and airends, blowers, compressors, dryers, filters, golf vehicles, hoists, fluid power components, power tools, pumps, rough terrain vehicles, utility and low-speed vehicles, and winches, as well as aftermarket controls, parts, accessories, and consumables. It also provides aftermarket and OEM parts and supplies. The company markets and sells its products under the American Standard, ARO, Club Car, Nexia, Thermo King, and Trane brands through sales offices, distributors, and dealers in the United States; and through sales and service companies with a supporting chain of distributors worldwide. Ingersoll-Rand Plc was founded in 1871 and is headquartered in Swords, Ireland.

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.

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