Graco (NYSE: GGG) and IDEX Corporation (NYSE:IEX) are both mid-cap industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Valuation & Earnings

This table compares Graco and IDEX Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Graco $1.40 billion 4.66 $397.35 million $1.55 75.22
IDEX Corporation $2.19 billion 4.21 $554.19 million $3.73 32.36

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

Profitability

This table compares Graco and IDEX Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Graco 6.50% 40.21% 18.93%
IDEX Corporation 13.12% 19.01% 9.60%

Dividends

Graco pays an annual dividend of $1.44 per share and has a dividend yield of 1.2%. IDEX Corporation pays an annual dividend of $1.48 per share and has a dividend yield of 1.2%. Graco pays out 92.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. IDEX Corporation pays out 39.7% of its earnings in the form of a dividend. Graco has raised its dividend for 7 consecutive years and IDEX Corporation has raised its dividend for 12 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for Graco and IDEX Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Graco 0 4 0 0 2.00
IDEX Corporation 0 9 1 0 2.10

Graco presently has a consensus target price of $101.00, indicating a potential downside of 13.37%. IDEX Corporation has a consensus target price of $104.43, indicating a potential downside of 13.48%. Given Graco’s higher probable upside, equities research analysts plainly believe Graco is more favorable than IDEX Corporation.

Volatility & Risk

Graco has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, IDEX Corporation has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Institutional and Insider Ownership

86.9% of Graco shares are owned by institutional investors. Comparatively, 99.1% of IDEX Corporation shares are owned by institutional investors. 5.7% of Graco shares are owned by insiders. Comparatively, 1.0% of IDEX Corporation 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.

Summary

IDEX Corporation beats Graco on 9 of the 17 factors compared between the two stocks.

Graco Company Profile

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.

IDEX Corporation Company Profile

IDEX Corporation (IDEX) operates an applied solutions business that sells pumps, flow meters and other fluidics systems, and components and engineered products. The Company operates through three segments: Fluid & Metering Technologies (FMT), Health & Science Technologies (HST) and Fire & Safety/Diversified Products (FSDP). With its segments, as of December 31, 2016, the Company maintained 13 platforms, where it focused on growth and acquisitions. The Company’s FMT segment provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agricultural and energy industries. The HST segment designs, produces and distributes precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems. Its FSDP segment produces firefighting pumps and controls, rescue tools, lifting bags and other components and systems; engineered stainless steel banding and clamping devices, and precision equipment.

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