Critical Comparison: Graco (NYSE:GGG) and Broadwind Energy (NASDAQ:BWEN)

Broadwind Energy (NASDAQ:BWEN) and Graco (NYSE:GGG) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Insider & Institutional Ownership

33.3% of Broadwind Energy shares are held by institutional investors. Comparatively, 93.9% of Graco shares are held by institutional investors. 6.1% of Broadwind Energy shares are held by company insiders. Comparatively, 2.2% of Graco shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Broadwind Energy and Graco”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadwind Energy	$158.05 million	0.55	$5.24 million	$0.22	16.91
Graco	$2.24 billion	5.48	$521.84 million	$3.07	24.06

Graco has higher revenue and earnings than Broadwind Energy. Broadwind Energy 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 Broadwind Energy and Graco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadwind Energy	3.30%	-2.05%	-1.09%
Graco	22.96%	18.66%	15.22%

Risk & Volatility

Broadwind Energy has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Graco has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Broadwind Energy and Graco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadwind Energy	0	2	1	0	2.33
Graco	0	4	3	0	2.43

Broadwind Energy presently has a consensus price target of $6.00, suggesting a potential upside of 61.29%. Graco has a consensus price target of $94.25, suggesting a potential upside of 27.59%. Given Broadwind Energy’s higher possible upside, analysts clearly believe Broadwind Energy is more favorable than Graco.

Summary

Graco beats Broadwind Energy on 11 of the 14 factors compared between the two stocks.

About Broadwind Energy

Broadwind, Inc. manufactures and sells structures, equipment, and components for clean tech and other specialized applications primarily in the United States. It operates through three segments: Heavy Fabrications, Gearing, and Industrial Solutions. The Heavy Fabrications segment provides fabrications to various industrial markets. It offers steel towers and adapters primarily to wind turbine manufacturers. Its Gearing segment provides gearing, gearboxes, and precision machined components to a range of customers in diverse markets, including surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore oil and gas fracking and drilling, marine, and other industrial markets. This segment also offers heat treat services for aftermarket and original equipment manufacturer applications. The Industrial Solutions segment provides supply chain solutions for offering instrumentation and controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes and wiring, energy storage services, and electromechanical devices; light fabrication, inventory management, and kitting and assembly services; packaging solutions; and supply chain solutions, light fabrication, inventory management, and kitting and assembly services for combined cycle natural gas turbine market. It sells its products to the energy, mining, and infrastructure sectors through its direct sales force and independent sales agents. The company was formerly known as Broadwind Energy, Inc. and changed its name to Broadwind, Inc. in May 2020. Broadwind, Inc. is headquartered in Cicero, Illinois.

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.