Comparing Gates Industrial (NYSE:GTES) & Douglas Dynamics (NYSE:PLOW)

Douglas Dynamics (NYSE:PLOW) and Gates Industrial (NYSE:GTES) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Institutional and Insider Ownership

91.8% of Douglas Dynamics shares are held by institutional investors. Comparatively, 98.5% of Gates Industrial shares are held by institutional investors. 1.5% of Douglas Dynamics shares are held by company insiders. Comparatively, 2.8% of Gates Industrial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Douglas Dynamics and Gates Industrial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Douglas Dynamics	8.71%	23.57%	10.23%
Gates Industrial	10.37%	10.42%	5.46%

Valuation & Earnings

This table compares Douglas Dynamics and Gates Industrial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Douglas Dynamics	$656.05 million	1.28	$46.90 million	$2.76	13.16
Gates Industrial	$3.44 billion	1.76	$251.40 million	$1.44	16.75

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Douglas Dynamics and Gates Industrial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Douglas Dynamics	0	2	2	1	2.80
Gates Industrial	0	3	9	0	2.75

Douglas Dynamics currently has a consensus target price of $51.67, indicating a potential upside of 42.28%. Gates Industrial has a consensus target price of $32.18, indicating a potential upside of 33.44%. Given Douglas Dynamics’ stronger consensus rating and higher probable upside, equities analysts clearly believe Douglas Dynamics is more favorable than Gates Industrial.

Risk and Volatility

Douglas Dynamics has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Gates Industrial has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Summary

Gates Industrial beats Douglas Dynamics on 9 of the 15 factors compared between the two stocks.

About Douglas Dynamics

Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment in North America. It operates through two segments, Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light trucks and heavy duty trucks, as well as various related parts and accessories. The Work Truck Solutions segment primarily manufactures municipal snow and ice control products; provides truck and vehicle upfits where it attaches component pieces of equipment, truck bodies, racking, and storage solutions to a vehicle chassis for use by end users for work related purposes; and manufactures storage solutions for trucks and vans, and cable pulling equipment for trucks. This segment also offers up-fit and storage solutions. It also provides customized turnkey solutions to governmental agencies, such as Departments of Transportation and municipalities. The company sells its products under the FISHER, SNOWEX, WESTERN, TURFEX, SWEEPEX, HENDERSON, BRINEXTREME, and DEJANA brands. It distributes its products primarily to professional snowplowers who are contracted to remove snow and ice from commercial and residential areas. The company was founded in 1948 and is headquartered in Milwaukee, Wisconsin.

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.