Head to Head Review: Graco (NYSE:GGG) versus Perma-Pipe International (NASDAQ:PPIH)

Graco (NYSE:GGG) and Perma-Pipe International (NASDAQ:PPIH) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Graco and Perma-Pipe International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graco	0	5	2	0	2.29
Perma-Pipe International	0	1	1	0	2.50

Graco presently has a consensus target price of $95.00, suggesting a potential upside of 24.66%. Perma-Pipe International has a consensus target price of $37.00, suggesting a potential upside of 21.11%. Given Graco’s higher probable upside, equities research analysts clearly believe Graco is more favorable than Perma-Pipe International.

Insider & Institutional Ownership

93.9% of Graco shares are owned by institutional investors. Comparatively, 28.4% of Perma-Pipe International shares are owned by institutional investors. 2.2% of Graco shares are owned by company insiders. Comparatively, 1.1% of Perma-Pipe International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Graco and Perma-Pipe International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Graco	$2.24 billion	5.52	$521.84 million	$3.18	23.96
Perma-Pipe International	$226.11 million	1.11	$17.03 million	$1.90	16.08

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

Risk and Volatility

Graco has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Perma-Pipe International has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Profitability

This table compares Graco and Perma-Pipe International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Graco	23.53%	19.54%	15.86%
Perma-Pipe International	6.89%	21.58%	8.79%

Summary

Graco beats Perma-Pipe International on 12 of the 14 factors compared between the two stocks.

About Graco

Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The Contractor segment offers sprayers to apply paint to walls and other structures; two-component proportioning systems that are used to spray polyurethane foam and polyurea coatings; and viscous coatings to roofs, as well as markings on roads, parking lots, athletic fields, and floors. The Industrial segment provides liquid finishing equipment, paint circulating and supply pumps, paint circulating advanced control systems, plural component coating proportioners, and accessories and spare parts; equipment that pumps, meters, mixes and dispenses sealant, adhesive, and composite materials; and gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators, and precision dispensing solutions. It also offers powder finishing products to coat powder finishing on metals under the Gema and SAT brands. The Process segment provides pumps to move and dispense chemicals, water, wastewater, petroleum, food, lubricants, and other fluids; pressure valves used in the oil and natural gas industry, other industrial processes, and research facilities; and chemical injection pumping solutions for injection of chemicals into producing oil wells and pipelines. It also supplies pumps, hose reels, meters, valves, and accessories for fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators in industrial and commercial equipment, compressors, turbines, and on- and off-road vehicles. It sells its products through distributors, original equipment manufacturers, and home center channels, as well as to end-users. The company was incorporated in 1926 and is headquartered in Minneapolis, Minnesota.

About Perma-Pipe International

Perma-Pipe International Holdings, Inc., together with its subsidiaries, engineers, designs, manufactures, and sells specialty piping and leak detection systems. It offers insulated and jacketed district heating and cooling piping systems for energy distribution from central energy plants to various locations; and primary and secondary containment piping systems for transporting chemicals, hazardous fluids, and petroleum products, as well as engages in the coating and insulation of oil and gas gathering and transmission pipelines. The company also offers liquid and powder based anti-corrosion coatings for external and internal surfaces of steel pipe, including shapes like bends, reducers, tees, and other spools/fittings that is used in pipelines for the transportation of oil and gas products and potable water. It has operations in the United States, Canada, the Middle East, North Africa, Europe, India, and internationally. The company was formerly known as MFRI, Inc. and changed its name to Perma-Pipe International Holdings, Inc. in March 2017. Perma-Pipe International Holdings, Inc. was incorporated in 1993 and is headquartered in Spring, Texas.