Critical Survey: Middleby (NASDAQ:MIDD) & Kawasaki Heavy Industries (OTCMKTS:KWHIY)

Kawasaki Heavy Industries (OTCMKTS:KWHIY) and Middleby (NASDAQ:MIDD) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Profitability

This table compares Kawasaki Heavy Industries and Middleby’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kawasaki Heavy Industries	4.74%	13.40%	3.49%
Middleby	-13.22%	17.44%	7.66%

Valuation and Earnings

This table compares Kawasaki Heavy Industries and Middleby”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kawasaki Heavy Industries	$15.35 billion	1.01	$713.84 million	$0.26	27.19
Middleby	$3.20 billion	1.61	-$277.73 million	($9.26)	-12.31

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

Risk and Volatility

Kawasaki Heavy Industries has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Middleby has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Institutional & Insider Ownership

98.5% of Middleby shares are owned by institutional investors. 9.7% of Middleby shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Kawasaki Heavy Industries and Middleby, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kawasaki Heavy Industries	0	2	0	0	2.00
Middleby	2	2	6	0	2.40

Middleby has a consensus price target of $160.38, suggesting a potential upside of 40.68%. Given Middleby’s stronger consensus rating and higher possible upside, analysts clearly believe Middleby is more favorable than Kawasaki Heavy Industries.

Summary

Middleby beats Kawasaki Heavy Industries on 9 of the 14 factors compared between the two stocks.

About Kawasaki Heavy Industries

Kawasaki Heavy Industries, Ltd. engages in aerospace systems, energy solution and marine engineering, precision machinery and robot, rolling stock, and motorcycle and engine businesses in Japan and internationally. It manufactures aircraft for the Japan ministry of defense; helicopters; and helicopter and jet engines for commercial aircrafts. The company also manufactures railway cars; a range of rolling stocks, including Shinkansen, electric cars, passenger coaches, freight cars, locomotives, diesel locomotives, and transit systems. In addition, it engages in the production and sale of energy-related machinery and systems, marine machinery and systems, industrial equipment, and environmental equipment. Further, the company manufactures and supplies motorcycles, off-road four wheelers, watercrafts, general-purpose gasoline engines, etc. Additionally, it manufactures and sells pumps, motors, valves, and various hydraulic machinery, as well as assembles hydraulic systems; and industrial robots for use in welding, assembly, handling, painting, and palletization for various industries, including automotive and electronics industries. The company was founded in 1878 and is headquartered in Tokyo, Japan.

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.