Atlas Copco (OTCMKTS:ALFVY) versus GEA Group Aktiengesellschaft (OTCMKTS:GEAGY) Critical Analysis

Atlas Copco (OTCMKTS:ALFVY) and GEA Group Aktiengesellschaft (OTCMKTS:GEAGY) are both mid-cap construction companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

0.1% of Atlas Copco shares are owned by institutional investors. Comparatively, 0.1% of GEA Group Aktiengesellschaft shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Atlas Copco and GEA Group Aktiengesellschaft’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlas Copco 11.62% 20.64% 8.29%
GEA Group Aktiengesellschaft 2.92% 5.13% 2.11%

Analyst Recommendations

This is a summary of recent ratings and price targets for Atlas Copco and GEA Group Aktiengesellschaft, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlas Copco 0 0 1 0 3.00
GEA Group Aktiengesellschaft 0 0 1 0 3.00

Dividends

Atlas Copco pays an annual dividend of $0.39 per share and has a dividend yield of 2.1%. GEA Group Aktiengesellschaft pays an annual dividend of $0.94 per share and has a dividend yield of 3.8%. Atlas Copco pays out 31.5% of its earnings in the form of a dividend. GEA Group Aktiengesellschaft pays out 125.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Atlas Copco has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, GEA Group Aktiengesellschaft has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Valuation & Earnings

This table compares Atlas Copco and GEA Group Aktiengesellschaft’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlas Copco $4.68 billion 1.65 $520.14 million $1.24 14.81
GEA Group Aktiengesellschaft $5.70 billion 0.79 $133.97 million $0.75 33.19

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

Summary

Atlas Copco beats GEA Group Aktiengesellschaft on 8 of the 12 factors compared between the two stocks.

Atlas Copco Company Profile

Alfa Laval AB (publ) provides heat transfer, separation, and fluid handling products and solutions worldwide. The company operates in five segments: Energy, Food & Water, Marine, Greenhouse, and Operations & Other. It offers fluid handling systems, such as automation and fluid control equipment; installation materials; analytical, cleaning validation, flow, level, pressure, temperature, and weighing instruments, as well as instrumentation accessories; mixing equipment; centrifugal, circumferential piston, rotary lobe, and screw pumps; rotary jet and spray heads; tank covers and accessories; and valves. The company also provides heat transfer products, including air heat exchangers; exhaust gas economizers, and oil/gas-fired composite steam and steam boilers; burners; oil/gas-fired hot water and thermal, and waste heat recovery heaters; plate and tubular heat exchangers; and scraped surface heat exchangers. In addition, it offers separation products comprising cylindrical filter baskets and filtering elements; decanters and separators; evaporation systems; filters and strainers; and membrane and pump control systems. Further, the company provides process solutions consisting of ballast water, brewery, bulk, desalination, edible oil, exhaust gas cleaning, filling, fresh water, fuel conditioning, marine exhaust gas, olive oil, protein, refrigeration, safety, and thermal solutions. It serves the biotech and pharmaceuticals, energy, chemicals,food, dairy, beverage, home and personal care, HVAC, machinery and manufacturing, marine and transportation, mining, minerals, pigment, pulp and paper, refrigeration, semiconductor and electronics, steel, and water and waste treatment industries. The company was formerly known as AB Separator and changed its name to Alfa Laval AB (publ) in 1963. Alfa Laval AB (publ) was founded in 1883 and is headquartered in Lund, Sweden.

GEA Group Aktiengesellschaft Company Profile

GEA Group Aktiengesellschaft focuses on the development and production of process technology and components for the food processing industry worldwide. It operates in two segments, Business Area Equipment and Business Area Solutions. The Business Area Equipment segment offers separators, valves, pumps, homogenizers, and refrigeration compressors, as well as process technology solutions for food processing and packaging applications; and dairy equipment, feeding systems, and slurry engineering solutions. The Business Area Solutions segment provides process solutions for the food and beverages, pharma, and chemical industries. 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.

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