Reviewing Graham (NYSE:GHM) and Paul Mueller (OTCMKTS:MUEL)

Paul Mueller (OTCMKTS:MUEL) and Graham (NYSE:GHM) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Valuation and Earnings

This table compares Paul Mueller and Graham”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paul Mueller	$248.59 million	1.62	$29.67 million	$40.20	11.12
Graham	$209.90 million	4.20	$12.23 million	$1.35	58.99

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

Profitability

This table compares Paul Mueller and Graham’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paul Mueller	12.37%	36.21%	18.19%
Graham	6.28%	13.26%	6.07%

Volatility and Risk

Paul Mueller has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Graham has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Institutional & Insider Ownership

69.5% of Graham shares are owned by institutional investors. 4.0% of Paul Mueller shares are owned by insiders. Comparatively, 6.0% of Graham shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Paul Mueller and Graham, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paul Mueller	0	0	0	0	0.00
Graham	0	2	3	0	2.60

Graham has a consensus price target of $72.50, indicating a potential downside of 8.95%. Given Graham’s stronger consensus rating and higher probable upside, analysts clearly believe Graham is more favorable than Paul Mueller.

Summary

Graham beats Paul Mueller on 8 of the 14 factors compared between the two stocks.

About Paul Mueller

Paul Mueller Company, together with its subsidiaries, provides manufactured equipment and components in the United States, North America, Asia, the Far East, the Netherlands, EU countries, Europe, and internationally. The company operates through four reportable segments: Dairy Farm Equipment, Industrial Equipment, Field Fabrication, and Transportation. The Dairy Farm Equipment segment offers milk cooling and storage equipment and accessories, refrigeration units, and heat recovery equipment for use on dairy farms to independent dealers for resale, and directly to farmers; and services for farmers, as well as milk coolers for rent to farmers. The Industrial Equipment segment sells food, beverage, chemical, and industrial processing equipment; and biopharmaceutical and pure water equipment, as well as stainless steel, alloy processing, storage tanks, and heat transfer products. The Field Fabrication segment sells large, field-fabricated tanks and vessels, such as stainless steel storage tanks for sanitary and industrial process applications. The Transportation segment offers delivery of products to customers; backhauls of materials and components; and contract carriage for third parties. It serves its products in various industries, including animal health, beverage, brewing, chemical, dairy farm, dairy processing, food, heat transfer, HVAC, industrial construction, oil and gas, personal care, pharmaceutical, pure water, tank fabrication, and wine. The company was founded in 1940 and is headquartered in Springfield, Missouri.

About Graham

Graham Corporation, together with its subsidiaries, designs and manufactures fluid, power, heat transfer, and vacuum equipment for chemical and petrochemical processing, defense, space, petroleum refining, cryogenic, energy, and other industries. It offers power plant systems, including ejectors and surface condensers; torpedo ejection, propulsion, and power systems, such as turbines, alternators, regulators, pumps, and blowers; and thermal management systems comprising pumps, blowers, and drive electronics for defense sector. The company also provides rocket propulsion systems consisting of turbopumps and fuel pumps; cooling systems, which include pumps, compressors, fans, and blowers; and life support systems that comprise fans, pumps, and blowers for space industry. In addition, it offers heat transfer and vacuum systems, including ejectors, process and surface condensers, liquid ring pumps, heat exchangers, and nozzles; power generation systems, such as turbines, generators, compressors, and pumps; and thermal management systems comprising pumps, blowers, and electronics for energy sector. Further, the company offers heat transfer and vacuum systems consisting of ejectors, process and surface condensers, liquid ring pumps, heat exchangers, and nozzles for chemical and petrochemical processing industry. The company also services and sells spare parts for its equipment. It sells its products directly in the United States, the Middle East, Canada, Asia, South America, and internationally. Graham Corporation was founded in 1936 and is headquartered in Batavia, New York.