Graco (NYSE: GGG) and Gorman-Rupp (NYSE:GRC) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, earnings and valuation.

Earnings & Valuation

This table compares Graco and Gorman-Rupp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Graco $1.33 billion 5.47 $40.67 million $1.86 69.60
Gorman-Rupp $382.07 million 2.21 $24.88 million $0.91 35.56

Graco has higher revenue and earnings than Gorman-Rupp. Gorman-Rupp is trading at a lower price-to-earnings ratio than Graco, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Graco has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Gorman-Rupp has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Dividends

Graco pays an annual dividend of $1.44 per share and has a dividend yield of 1.1%. Gorman-Rupp pays an annual dividend of $0.50 per share and has a dividend yield of 1.5%. Graco pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gorman-Rupp pays out 54.9% of its earnings in the form of a dividend. Graco has raised its dividend for 44 consecutive years and Gorman-Rupp has raised its dividend for 12 consecutive years. Gorman-Rupp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Graco and Gorman-Rupp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Graco 7.72% 42.05% 19.92%
Gorman-Rupp 6.25% 9.72% 7.75%

Insider & Institutional Ownership

86.2% of Graco shares are owned by institutional investors. Comparatively, 52.7% of Gorman-Rupp shares are owned by institutional investors. 5.7% of Graco shares are owned by insiders. Comparatively, 12.4% of Gorman-Rupp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for Graco and Gorman-Rupp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Graco 0 9 0 0 2.00
Gorman-Rupp 0 0 0 0 N/A

Graco currently has a consensus price target of $115.29, indicating a potential downside of 10.95%. Given Graco’s higher possible upside, equities research analysts plainly believe Graco is more favorable than Gorman-Rupp.

Summary

Graco beats Gorman-Rupp on 11 of the 15 factors compared between the two stocks.

About Graco

Graco Inc. designs, manufactures and markets systems and equipment used to move, measure, control, dispense and spray fluid and powder materials. The Company specializes in equipment for applications that involve materials with viscosities, materials with abrasive or corrosive properties, and multiple-component materials that require ratio control. The Company operates through three segments: Industrial, Process and Contractor. The Industrial segment markets equipment and pre-engineered packages for moving and applying paints, coatings, sealants, adhesives and other fluids. The Process segment markets pumps, valves, meters and accessories to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants and other fluids. The Contractor segment markets sprayers for architectural coatings for painting, corrosion control, texture and line striping. Its equipment is used in the manufacturing, processing, construction and maintenance industries.

About Gorman-Rupp

The Gorman-Rupp Company designs, manufactures and sells pumps and pump systems. The Company offers its products for use in dewatering; petroleum original equipment; agriculture; fire protection; heating, ventilating and air conditioning; military, and other liquid-handling applications. The Company operates in the manufacture and international sale of pumps and pump systems segment. The Company produces various types of pumps, which include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, high pressure booster, rotary gear, diaphragm, bellows and oscillating. Its larger pumps are sold for use in the construction, industrial, water and wastewater handling fields; for flood control; for improving low residential water pressure, and for pumping refined petroleum products, including the ground refueling of aircraft, and for various agricultural purposes.

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