Critical Contrast: Regal Rexnord (NYSE:RRX) and GEA Group (OTCMKTS:GEAGF)

GEA Group (OTCMKTS:GEAGF) and Regal Rexnord (NYSE:RRX) are both large-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

99.7% of Regal Rexnord shares are owned by institutional investors. 0.8% of Regal Rexnord shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares GEA Group and Regal Rexnord”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GEA Group	$5.87 billion	2.18	$416.65 million	$2.32	33.90
Regal Rexnord	$5.93 billion	2.13	$279.50 million	$4.20	45.31

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

Analyst Recommendations

This is a summary of recent ratings and price targets for GEA Group and Regal Rexnord, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GEA Group	0	2	0	1	2.67
Regal Rexnord	0	3	7	0	2.70

Regal Rexnord has a consensus target price of $227.50, suggesting a potential upside of 19.56%. Given Regal Rexnord’s stronger consensus rating and higher probable upside, analysts plainly believe Regal Rexnord is more favorable than GEA Group.

Profitability

This table compares GEA Group and Regal Rexnord’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%
Regal Rexnord	4.71%	9.60%	4.61%

Risk & Volatility

GEA Group has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Regal Rexnord has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Summary

Regal Rexnord beats GEA Group on 8 of the 15 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 Regal Rexnord

Regal Rexnord Corporation manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. The Industrial Powertrain Solutions segment provides mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes, gear motors, clutches, brakes, special, and industrial powertrain components and solutions for food and beverage, bulk material handling, eCommerce/warehouse distribution, energy, mining, marine, agricultural machinery, turf and garden, and general industrial markets. The Power Efficiency Solutions segment offers AC and DC motors, electronic variable speed controls, and blowers for residential, commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, agriculture, conveying, and general commercial equipment markets. The Automation and Motion Control segment provides conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors, motion controls, automation transfer switches, and switchgear for industrial applications and automation systems for material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food and beverage processing, and other applications. The Industrial Systems segment offers integral motors, alternators, and aftermarket parts and kits for agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment markets. It sells its products directly to original equipment manufacturers, distributors, and end-users. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is based in Milwaukee, Wisconsin.