Financial Comparison: Gorman-Rupp (GRC) & Xylem (XYL)

Gorman-Rupp (NYSE: GRC) and Xylem (NYSE:XYL) are both industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Earnings & Valuation

This table compares Gorman-Rupp and Xylem’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gorman-Rupp $382.07 million 2.14 $24.88 million $0.90 34.83
Xylem $3.77 billion 3.26 $260.00 million $1.72 39.76

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

Volatility and Risk

Gorman-Rupp has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Xylem has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Insider & Institutional Ownership

52.8% of Gorman-Rupp shares are held by institutional investors. Comparatively, 85.6% of Xylem shares are held by institutional investors. 12.4% of Gorman-Rupp shares are held by insiders. Comparatively, 0.8% of Xylem shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Gorman-Rupp pays an annual dividend of $0.50 per share and has a dividend yield of 1.6%. Xylem pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Gorman-Rupp pays out 55.6% of its earnings in the form of a dividend. Xylem pays out 41.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Gorman-Rupp has increased its dividend for 44 consecutive years and Xylem has increased its dividend for 4 consecutive years. Gorman-Rupp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Gorman-Rupp 6.25% 9.72% 7.75%
Xylem 6.85% 17.74% 6.25%

Analyst Ratings

This is a summary of current recommendations for Gorman-Rupp and Xylem, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gorman-Rupp 0 0 0 0 N/A
Xylem 0 5 8 0 2.62

Xylem has a consensus target price of $64.64, suggesting a potential downside of 5.47%. Given Xylem’s higher probable upside, analysts plainly believe Xylem is more favorable than Gorman-Rupp.

Summary

Xylem beats Gorman-Rupp on 11 of the 16 factors compared between the two stocks.

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.

About Xylem

Xylem Inc. is a water technology company. The Company designs, manufactures and services engineered solutions across a range of critical applications. It is an equipment and service provider for water and wastewater applications with a portfolio of products and services addressing the cycle of water, from collection, distribution and use to the return of water to the environment. It has three business segments, which include Water Infrastructure, Applied Water and Sensus. Water Infrastructure focuses on the transportation, treatment and testing of water, offering a range of products, including water and wastewater pumps, and controls and systems. Applied Water serves the uses of water and focuses on the residential, commercial, industrial and agricultural markets. The Sensus segment’s products include metering, networked communications, measurement and control technologies, software and services, including cloud-based analytics, remote monitoring and data management.

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