Analyzing Omnitek Engineering (OTCMKTS:OMTK) and Gates Industrial (NYSE:GTES)
by Sarita Garza · The Markets DailyGates Industrial (NYSE:GTES – Get Free Report) and Omnitek Engineering (OTCMKTS:OMTK – Get Free Report) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.
Profitability
This table compares Gates Industrial and Omnitek Engineering’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gates Industrial | 6.93% | 10.38% | 5.22% |
| Omnitek Engineering | 18.80% | -22.26% | 28.98% |
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Gates Industrial and Omnitek Engineering, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gates Industrial | 0 | 6 | 6 | 0 | 2.50 |
| Omnitek Engineering | 0 | 0 | 0 | 0 | 0.00 |
Gates Industrial currently has a consensus price target of $27.18, suggesting a potential upside of 23.44%. Given Gates Industrial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Gates Industrial is more favorable than Omnitek Engineering.
Insider and Institutional Ownership
98.5% of Gates Industrial shares are held by institutional investors. 2.7% of Gates Industrial shares are held by insiders. Comparatively, 45.5% of Omnitek Engineering shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Gates Industrial and Omnitek Engineering”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gates Industrial | $3.41 billion | 1.67 | $194.90 million | $0.91 | 24.20 |
| Omnitek Engineering | $1.02 million | 0.33 | -$170,000.00 | $0.02 | 0.77 |
Gates Industrial has higher revenue and earnings than Omnitek Engineering. Omnitek Engineering is trading at a lower price-to-earnings ratio than Gates Industrial, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Gates Industrial has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, Omnitek Engineering has a beta of -0.22, suggesting that its share price is 122% less volatile than the S&P 500.
Summary
Gates Industrial beats Omnitek Engineering on 11 of the 14 factors compared between the two stocks.
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.
About Omnitek Engineering
Omnitek Engineering Corp. develops and sells technology to convert diesel engines to an alternative fuel, natural gas engines, and complementary products in the United States and internationally. It offers conversion kits for converting diesel engines to run on an alternative fuel, including compressed, liquefied, and renewable natural gas, as well as liquid petroleum gas; natural gas engines and components; and high-pressure natural gas coalescing filters. The company's products are used for stationary applications; and the transportation market, such as light commercial vehicles, minibuses, heavy-duty trucks, and municipal buses, as well as rail and marine applications. It sells and delivers its products through its distributors, system integrators, fleet operators, and engine conversion companies, as well as directly to end-users. The company was incorporated in 2001 and is headquartered in Vista, California.