Commercial kitchens

Out of the Frying Pan into the Fire?

Rational makes steam cooking devices for use in commercial kitchens.
  • Why it matters

    Why it matters

    Unless Rational expands its very narrow product line, it is unlikely to achieve significant new growth.

  • Facts


    • Rational makes hot-air and steam cooking devices for commercial kitchens.
    • It supplies equipment to Kentucky Fried Chicken, as well as discount food retailer Aldi.
    • The firm has just replaced robot maker Kuka in Germany’s MDAX index.
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Eleven years ago, analysts said shares in kitchen-equipment supplier Rational were rated too high. A decade later, and experts are again issuing warnings about the specialist in commercial steam-cooking devices.

But one essential difference exists: The stock in 2005 was priced at €85 ($96.10). On Tuesday, it was about €453. Those who held on to their shares have watched the value increase fivefold, and each share also collects €61.25 in dividends.

It isn’t just the rise in the share price since the Bavarian company’s IPO in 2000 that has awakened interest. Last week, Rational replaced robot-maker Kuka in the MDAX, Germany’s index of the top 50 medium-sized listed companies in terms of market capitalization and volume of shares traded.

Since Chinese investors took a stake in Kuka, its stocks have been trading too little for it to fit in the mid-cap index. The Deutsche Börse, the operator of the Frankfurt stock exchange, therefore brought Rational back into the MDAX.

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