Financial Contrast: Griffon (NYSE:GFF) and Icahn Enterprises (NASDAQ:IEP)

Icahn Enterprises (NASDAQ:IEP) and Griffon (NYSE:GFF) are both mid-cap multi-sector conglomerates companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Institutional and Insider Ownership

87.1% of Icahn Enterprises shares are held by institutional investors. Comparatively, 73.2% of Griffon shares are held by institutional investors. 90.1% of Icahn Enterprises shares are held by company insiders. Comparatively, 10.2% of Griffon shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Icahn Enterprises pays an annual dividend of $2.00 per share and has a dividend yield of 24.3%. Griffon pays an annual dividend of $0.88 per share and has a dividend yield of 0.9%. Icahn Enterprises pays out -253.2% of its earnings in the form of a dividend. Griffon pays out 95.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Griffon has raised its dividend for 1 consecutive years. Icahn Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Icahn Enterprises and Griffon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Icahn Enterprises	-4.04%	-10.13%	-2.51%
Griffon	1.76%	228.83%	12.35%

Volatility & Risk

Icahn Enterprises has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Griffon has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Earnings and Valuation

This table compares Icahn Enterprises and Griffon”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Icahn Enterprises	$10.02 billion	0.49	-$445.00 million	($0.79)	-10.42
Griffon	$2.54 billion	1.72	$51.11 million	$0.92	102.02

Griffon has lower revenue, but higher earnings than Icahn Enterprises. Icahn Enterprises is trading at a lower price-to-earnings ratio than Griffon, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Icahn Enterprises and Griffon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Icahn Enterprises	1	1	0	0	1.50
Griffon	0	2	3	3	3.13

Griffon has a consensus target price of $101.80, indicating a potential upside of 8.46%. Given Griffon’s stronger consensus rating and higher probable upside, analysts clearly believe Griffon is more favorable than Icahn Enterprises.

Summary

Griffon beats Icahn Enterprises on 13 of the 18 factors compared between the two stocks.

About Icahn Enterprises

Icahn Enterprises L.P., through its subsidiaries, engages in the investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. The Investment segment invests its proprietary capital through various private investment funds. This segment provides investment advisory and other related services. The Energy segment refines and markets transportation fuels in the form of gasoline and diesel fuels, as well as renewable diesel; and manufactures nitrogen fertilizers in the form of urea ammonium nitrate and ammonia. The Automotive segment sells automotive parts and materials, and retailed merchandise; offers automotive repair and maintenance services; and leases real estate properties. The Food Packaging segment produces and sells cellulosic, fibrous, and plastic casings that are used to prepare and package processed meat products. The Real Estate segment is involved in the leasing of land, retail, office, and industrial properties; the development and sale of single-family homes; and the operation of country clubs. The Home Fashion segment manufactures, sources, markets, distributes, and sells home fashion consumer products. The Pharma segment offers pharmaceutical products and services. The company was incorporated in 1987 and is headquartered in Sunny Isles Beach, Florida.

About Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.