Head-To-Head Comparison: Babcock (NYSE:BW) vs. GrafTech International (NYSE:EAF)

GrafTech International (NYSE:EAF) and Babcock (NYSE:BW) are both small-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Profitability

This table compares GrafTech International and Babcock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GrafTech International	-34.58%	N/A	-17.50%
Babcock	-2.17%	-4.51%	0.70%

Valuation & Earnings

This table compares GrafTech International and Babcock”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrafTech International	$512.92 million	0.39	-$219.84 million	($6.80)	-1.12
Babcock	$834.35 million	1.37	-$36.16 million	($0.18)	-42.56

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

Volatility and Risk

GrafTech International has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500. Comparatively, Babcock has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for GrafTech International and Babcock, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrafTech International	3	3	0	0	1.50
Babcock	1	2	3	0	2.33

GrafTech International presently has a consensus target price of $10.67, indicating a potential upside of 40.46%. Babcock has a consensus target price of $14.25, indicating a potential upside of 86.01%. Given Babcock’s stronger consensus rating and higher possible upside, analysts clearly believe Babcock is more favorable than GrafTech International.

Insider & Institutional Ownership

92.8% of GrafTech International shares are owned by institutional investors. Comparatively, 83.2% of Babcock shares are owned by institutional investors. 1.2% of GrafTech International shares are owned by insiders. Comparatively, 2.8% of Babcock shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Babcock beats GrafTech International on 10 of the 14 factors compared between the two stocks.

About GrafTech International

GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide. The company offers graphite electrodes to produce electric arc furnace steel and other ferrous and non-ferrous metals; and petroleum needle coke, a crystalline form of carbon used in the production of graphite electrodes and synthetic graphite. It sells its products primarily through direct sales force, independent sales representatives, and distributors. GrafTech International Ltd. was founded in 1886 and is headquartered in Brooklyn Heights, Ohio.

About Babcock

Babcock & Wilcox Enterprises, Inc. engages in the provision of fossil and renewable power generation and environmental equipment. It operates through the following segments: B&W Renewable, B&W Environmental, and B&W Thermal. The B&W Renewable segment supports a circular economy, diverting waste from landfills to use for power generation and replacing fossil fuels, while recovering metals and reducing emissions. The B&W Environmental segment focuses on systems for cooling, ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control, and mercury control. The B&W Thermal segment offers steam generation equipment, aftermarket parts, construction, maintenance, and field services for plants in the power generation, oil and gas, and industrial sectors. The company was founded by George H. Babcock, Stephen Wilcox, Jr., and Joseph P. Manton in 1856 and is headquartered in Akron, OH.