Head to Head Analysis: Middleby (NASDAQ:MIDD) & Flowserve (NYSE:FLS)

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

Insider & Institutional Ownership

93.9% of Flowserve shares are held by institutional investors. Comparatively, 98.6% of Middleby shares are held by institutional investors. 0.8% of Flowserve shares are held by company insiders. Comparatively, 6.2% of Middleby shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Flowserve and Middleby’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flowserve	7.32%	21.19%	8.39%
Middleby	-7.44%	14.57%	6.95%

Earnings and Valuation

This table compares Flowserve and Middleby”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flowserve	$4.73 billion	1.96	$346.25 million	$2.62	27.81
Middleby	$3.20 billion	1.97	-$277.73 million	($5.73)	-23.36

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

Volatility & Risk

Flowserve has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Middleby has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Flowserve and Middleby, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowserve	0	3	8	1	2.83
Middleby	1	2	5	0	2.50

Flowserve currently has a consensus price target of $88.80, suggesting a potential upside of 21.87%. Middleby has a consensus price target of $174.17, suggesting a potential upside of 30.09%. Given Middleby’s higher probable upside, analysts plainly believe Middleby is more favorable than Flowserve.

Summary

Flowserve beats Middleby on 10 of the 15 factors compared between the two stocks.

About Flowserve

Flowserve Corporation designs, manufactures, distributes, and services industrial flow management equipment in the United States, Canada, Mexico, Europe, the Middle East, Africa, and the Asia Pacific. It operates through Flowserve Pump Division (FPD) and Flow Control Division (FCD) segments. The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services; and equipment services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines and in the oil and gas production and process markets. The FCD segment provides engineered and industrial valve and automation systems, including isolation and control valves, actuation, controls, and related equipment; and equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities. This segment's products are used to control, direct, and manage the flow of liquids, gases, and multi-phase fluids. It primarily serves oil and gas, chemical and pharmaceuticals, power generation, and water management markets, as well as general industries, including mining and ore processing, pulp and paper, food and beverage, and other smaller applications. The company distributes its products through direct sales, distributors, and sales representatives. Flowserve Corporation was founded in 1790 and is headquartered in Irving, Texas.

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.