Gorman-Rupp (NYSE:GRC) and Middleby (NASDAQ:MIDD) Financial Analysis

Middleby (NASDAQ:MIDD) and Gorman-Rupp (NYSE:GRC) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Middleby and Gorman-Rupp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Middleby	1	2	6	0	2.56
Gorman-Rupp	0	0	1	1	3.50

Middleby currently has a consensus target price of $189.71, indicating a potential upside of 32.13%. Given Middleby’s higher possible upside, equities research analysts clearly believe Middleby is more favorable than Gorman-Rupp.

Insider and Institutional Ownership

98.6% of Middleby shares are held by institutional investors. Comparatively, 59.3% of Gorman-Rupp shares are held by institutional investors. 9.7% of Middleby shares are held by company insiders. Comparatively, 11.6% of Gorman-Rupp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Middleby and Gorman-Rupp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Middleby	-11.46%	15.94%	7.34%
Gorman-Rupp	8.45%	15.08%	7.18%

Volatility and Risk

Middleby has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, Gorman-Rupp has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.

Valuation and Earnings

This table compares Middleby and Gorman-Rupp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Middleby	$3.20 billion	2.09	-$277.73 million	($8.48)	-16.93
Gorman-Rupp	$682.39 million	2.84	$53.02 million	$2.23	32.92

Gorman-Rupp has lower revenue, but higher earnings than Middleby. Middleby is trading at a lower price-to-earnings ratio than Gorman-Rupp, indicating that it is currently the more affordable of the two stocks.

Summary

Gorman-Rupp beats Middleby on 8 of the 14 factors compared between the two stocks.

About Middleby

The Middleby Corporation designs, markets, manufactures, distributes, and services foodservice, food processing, and residential kitchen equipment worldwide. Its Commercial Foodservice Equipment Group segment offers conveyor, combi, convection, baking, proofing, deck, speed cooking, and hydrovection ovens; ranges, fryers, and rethermalizers; steam cooking, food warming, catering, induction cooking, and countertop cooking equipment; heated cabinets, charbroilers, ventless cooking systems, kitchen ventilation, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, cold rooms, ice machines, and freezers; soft serve ice cream, coffee and beverage dispensing, home and professional craft brewing equipment; and fry dispensers, bottle filling and canning equipment, IoT solutions, and controls development and manufacturing. The company's Food Processing Equipment Group segment provides batch, baking, proofing, conveyor belt, and continuous processing ovens; frying and automated thermal processing systems; tumblers, massagers, grinders, slicers, reduction and emulsion systems, mixers, and blenders; battering, breading, and seeding equipment; water cutting systems, food presses, food suspension equipment, filling and depositing solutions, and forming equipment; and automated washing systems, auto-guided vehicles, food safety, food handling, freezing, and defrosting and packaging equipment. Its Residential Kitchen Equipment Group segment offers kitchen equipment comprising cookers, stoves, cooktops, microwaves, ovens, refrigerators, dishwashers, undercounter refrigeration, wine cellars, ice machines, beer dispensers, mixers, rotisseries, and ventilation and outdoor cooking equipment. The company was formerly known as Middleby Marshall Oven Company and changed its name to The Middleby Corporation in 1985. The company was founded in 1888 and is based in Elgin, Illinois.

About Gorman-Rupp

The Gorman-Rupp Company designs, manufactures, and sells pumps and pump systems in the United States and internationally. The company’s products include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, high-pressure booster, rotary gear, diaphragm, bellows, and oscillating pumps. Its products are used in water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire suppression, heating, ventilating and air conditioning, military, and other liquid-handling applications. The company markets its products through a network of distributors, manufacturers’ representatives, third-party distributor catalogs, direct sales, and e-commerce. The Gorman-Rupp Company was founded in 1933 and is headquartered in Mansfield, Ohio.