Brady Corporation (NYSE: BRC) and G&K Services (NASDAQ:GKSR) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Earnings and Valuation

This table compares Brady Corporation and G&K Services’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brady Corporation $1.11 billion 1.66 $156.45 million $1.84 19.51
G&K Services N/A N/A N/A N/A N/A

Brady Corporation has higher revenue and earnings than G&K Services.

Dividends

Brady Corporation pays an annual dividend of $0.82 per share and has a dividend yield of 2.3%. G&K Services does not pay a dividend. Brady Corporation pays out 44.6% of its earnings in the form of a dividend. G&K Services has increased its dividend for 31 consecutive years.

Profitability

This table compares Brady Corporation and G&K Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brady Corporation 8.59% 13.93% 8.84%
G&K Services 3.79% 9.12% 4.03%

Insider and Institutional Ownership

76.6% of Brady Corporation shares are held by institutional investors. 15.6% of Brady Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Brady Corporation and G&K Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brady Corporation 1 2 1 0 2.00
G&K Services 0 0 0 0 N/A

Brady Corporation currently has a consensus price target of $37.25, indicating a potential upside of 3.76%. Given Brady Corporation’s higher possible upside, equities analysts clearly believe Brady Corporation is more favorable than G&K Services.

Summary

Brady Corporation beats G&K Services on 9 of the 11 factors compared between the two stocks.

About Brady Corporation

Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.

About G&K Services

G&K Services, Inc. is a service-focused provider of branded uniform and facility services programs. The Company provides a range of workwear and protective safety apparel through rental and direct purchase programs. The Company also supplies various facility products and services, including floor mats, towels, mops, restroom hygiene products, and first aid supplies. It also manufactures certain work apparel garments that are used to support its garment rental and direct purchase programs. It operates in two segments: United States (includes the Dominican Republic) and Canada. The Company operated from approximately 160 locations, as of July 2, 2016. The Company serves a diverse base of customer locations in various industries, including automotive, warehousing, distribution, transportation, energy, manufacturing, food processing, retail, restaurants, construction and trades, hospitality, government, healthcare and others.

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