Gorman-Rupp (GRC) & Flowserve (FLS) Head to Head Comparison

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

Volatility and Risk

Gorman-Rupp has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Flowserve has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Institutional and Insider Ownership

52.7% of Gorman-Rupp shares are held by institutional investors. 12.4% of Gorman-Rupp shares are held by insiders. Comparatively, 1.0% of Flowserve shares are held by 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

Gorman-Rupp pays an annual dividend of $0.50 per share and has a dividend yield of 1.5%. Flowserve pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. Gorman-Rupp pays out 55.6% of its earnings in the form of a dividend. Flowserve pays out 61.8% 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 raised its dividend for 10 consecutive years and Flowserve has raised its dividend for 44 consecutive years. Flowserve is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Gorman-Rupp and Flowserve’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gorman-Rupp $382.07 million 2.21 $24.88 million $0.90 35.96
Flowserve $3.99 billion 1.39 $132.45 million $1.23 34.46

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

Analyst Recommendations

This is a breakdown of recent ratings for Gorman-Rupp and Flowserve, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gorman-Rupp 0 0 0 0 N/A
Flowserve 1 8 5 0 2.29

Flowserve has a consensus target price of $44.10, indicating a potential upside of 4.03%. Given Flowserve’s higher possible upside, analysts clearly believe Flowserve is more favorable than Gorman-Rupp.

Profitability

This table compares Gorman-Rupp and Flowserve’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%
Flowserve 4.58% 12.09% 4.33%

Summary

Flowserve beats Gorman-Rupp on 9 of the 16 factors compared between the two stocks.

Gorman-Rupp Company Profile

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.

Flowserve Company Profile

Flowserve Corporation is a manufacturer and aftermarket service provider of flow control systems. The Company’s segments include Engineered Product Division, Industrial Product Division and Flow Control Division. Its geographic segments include North America, Europe, Asia Pacific, Middle East and Africa, and Latin America. It develops and manufactures precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in its customer’s critical processes. Its product portfolio of pumps, valves, seals, automation and aftermarket services supports infrastructure industries, including oil and gas, chemical, power generation and water management. It offers aftermarket equipment services, such as installation, diagnostics, repair and retrofitting through manufacturing platform and network of Quick Response Centers. Its products include oil and gas, general industries, chemical, power generation and water management.

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