Introduction
Welbilt, Inc. (WBT) is the former foodservice division of The Manitowoc Company (MTW). Since being spun out in 2016, the company has been massively profitable, with stable 30%+ ROAs and consistent growth. The firm operates in a duopoly with Middleby (MIDD), with both companies generating profits well above corporate averages.
Similar to Middleby following the Great Recession, investors don't appear to understand how strong Welbilt's returns truly are or the sustainability of their economic profits. This may have to do with the company's material $855mn debt headwall in