Terex (NYSE:TEX) & GEA Group Aktiengesellschaft (OTCMKTS:GEAGY) Head-To-Head Review

Terex (NYSE:TEX) and GEA Group Aktiengesellschaft (OTCMKTS:GEAGY) are both mid-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Terex	2.23%	12.24%	5.16%
GEA Group Aktiengesellschaft	-3.20%	-7.43%	-2.78%

Dividends

Terex pays an annual dividend of $0.68 per share and has a dividend yield of 1.1%. GEA Group Aktiengesellschaft pays an annual dividend of $0.93 per share and has a dividend yield of 2.3%. Terex pays out 34.7% of its earnings in the form of a dividend. GEA Group Aktiengesellschaft pays out -80.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Terex has raised its dividend for 5 consecutive years. GEA Group Aktiengesellschaft is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Terex and GEA Group Aktiengesellschaft, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terex	0	5	5	2	2.75
GEA Group Aktiengesellschaft	0	1	1	0	2.50

Terex presently has a consensus price target of $78.91, indicating a potential upside of 24.70%. Given Terex’s stronger consensus rating and higher possible upside, equities analysts plainly believe Terex is more favorable than GEA Group Aktiengesellschaft.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terex	$5.42 billion	1.33	$221.00 million	$1.96	32.29
GEA Group Aktiengesellschaft	$5.47 billion	1.34	-$191.04 million	($1.16)	-34.99

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

Insider & Institutional Ownership

92.9% of Terex shares are owned by institutional investors. Comparatively, 0.3% of GEA Group Aktiengesellschaft shares are owned by institutional investors. 1.6% of Terex shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Terex has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, GEA Group Aktiengesellschaft has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Summary

Terex beats GEA Group Aktiengesellschaft on 14 of the 18 factors compared between the two stocks.

About Terex

Terex Corporation manufactures and sells aerial work platforms and materials processing machinery worldwide. It operates in two segments, Materials Processing (MP) and Aerial Work Platforms (AWP). The MP segment designs, manufactures, services, and markets materials processing and specialty equipment, includes crushers, washing systems, screens, trommels, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and related components and replacement parts under the Terex, Powerscreen, Fuchs, EvoQuip, Canica, Cedarapids, CBI, Simplicity, Franna, Terex Ecotec, Finlay, ProAll, ZenRobotics, Terex Washing Systems, Terex MPS, Terex Jaques, Terex Advance, ProStack, Terex Bid-Well, MDS, and Terex Recycling Systems brands. Its products are used in construction, infrastructure, and recycling projects; quarrying and mining, and material handling applications; maintenance applications to lift equipment or material; and landscaping and biomass production industries. The AWP segment designs, manufactures, services, and markets aerial work platform equipment, utility equipment, and telehandlers under the Terex and Genie brands. Its products include portable material lifts, portable aerial work platforms, trailer-mounted articulating booms, self-propelled articulating and telescopic booms, and scissor lifts, as well as related components and replacement parts for construction and maintenance of industrial, commercial, institutional, and residential buildings and facilities, transmission and distribution lines, construction and foundation drilling applications, and other commercial operations, as well as in tree trimming and various infrastructure projects. The company offers financing solutions to assist customers in the rental, leasing, and acquisition of its products. Terex Corporation was founded in 1933 and is based in Norwalk, Connecticut.

About GEA Group Aktiengesellschaft

GEA Group Aktiengesellschaft engages in the development and production of systems 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 dairy, food, beverage, pharma, and chemical industries. The company was formerly known as mg technologies ag and changed its name to GEA Group Aktiengesellschaft in 2005. The company has a strategic partnership with SAP SE. GEA Group Aktiengesellschaft was founded in 1881 and is headquartered in Düsseldorf, Germany.