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Welbilt makes kitchen equipment for chefs and restaurant chains, while JBT is a food technology solutions provider, sterilizing canned foods, freezing frozen food and processing meat. Some 40% of its revenues also come from its airport business, where it sells ground equipment, boarding bridges and other products.
Both stocks are roughly flat on the year, but JBT could be set to outperform. The company reported 22% revenue growth in 2016 and 12.5% the year prior. While part of that was from acquisitions, it's got sales going in the right direction. Welbilt though saw sales fall 7.5% in 2016 and dip slightly in 2015.
Gross margins at Welbilt fell 200 basis points to 34.5%, while net margins dropped 420 basis points to 5.5%. JBO has lower margins -- 28.3% and 5% respectively -- but its margins aren't declining by much. Gross margins fell 30 basis points and net margins declined 10 basis points.
Net income at Welbilt dropped nearly 50% last year, while net income at JBT climbed some 20%.
This isn't to put Welbilt in a bad light, Cramer noted, adding that the company tells a really compelling story and will treat investors well over the long term. But it's suffering because restaurants are struggling in the U.S.
Trading at 24 times earnings with a better-performing business, JBT is a better pick at this time than Welbilt, which trades at 21 times earnings. It's better to a pay a premium for a company doing much better. Cramer said investors can buy JBT at current levels.
Meanwhile, on Real Money, Peter Tchir said the jobs report wasn't all that bad, and he anticipated Treasury yields would be buoyed. He was right. Get more of this kind of insight with a free trial subscription to Real Money.
Cramer and the AAP team say Magellan Midstream Partners (MMP) - Get Report is getting another leg up. Find out what they're telling their investment club members. Get a free trial subscription to Action Alerts PLUS.
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