Gorman-Rupp (NYSE: GRC) and Ampco-Pittsburgh (NYSE:AP) are both small-cap industrial products companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Gorman-Rupp and Ampco-Pittsburgh, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gorman-Rupp 0 0 0 0 N/A
Ampco-Pittsburgh 0 0 2 0 3.00

Ampco-Pittsburgh has a consensus price target of $22.00, suggesting a potential upside of 71.21%. Given Ampco-Pittsburgh’s higher probable upside, analysts clearly believe Ampco-Pittsburgh is more favorable than Gorman-Rupp.

Profitability

This table compares Gorman-Rupp and Ampco-Pittsburgh’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gorman-Rupp 6.25% 9.72% 7.75%
Ampco-Pittsburgh -12.67% -13.75% -3.67%

Valuation and Earnings

This table compares Gorman-Rupp and Ampco-Pittsburgh’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gorman-Rupp $382.07 million 2.10 $24.88 million $0.90 34.18
Ampco-Pittsburgh $331.87 million 0.48 -$79.82 million ($4.24) -3.03

Gorman-Rupp has higher revenue and earnings than Ampco-Pittsburgh. Ampco-Pittsburgh is trading at a lower price-to-earnings ratio than Gorman-Rupp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Gorman-Rupp has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Ampco-Pittsburgh has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500.

Dividends

Gorman-Rupp pays an annual dividend of $0.50 per share and has a dividend yield of 1.6%. Ampco-Pittsburgh pays an annual dividend of $0.18 per share and has a dividend yield of 1.4%. Gorman-Rupp pays out 55.6% of its earnings in the form of a dividend. Ampco-Pittsburgh pays out -4.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ampco-Pittsburgh has increased its dividend for 44 consecutive years.

Institutional and Insider Ownership

52.8% of Gorman-Rupp shares are owned by institutional investors. Comparatively, 57.9% of Ampco-Pittsburgh shares are owned by institutional investors. 12.4% of Gorman-Rupp shares are owned by company insiders. Comparatively, 29.9% of Ampco-Pittsburgh shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Gorman-Rupp beats Ampco-Pittsburgh on 8 of the 15 factors compared between the two stocks.

Gorman-Rupp Company Profile

The Gorman-Rupp Company designs, manufactures and sells pumps and pump systems. The Company offers its products for use in dewatering; petroleum original equipment; agriculture; fire protection; heating, ventilating and air conditioning; military, and other liquid-handling applications. The Company operates in the manufacture and international sale of pumps and pump systems segment. The Company produces various types of pumps, which include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, high pressure booster, rotary gear, diaphragm, bellows and oscillating. Its larger pumps are sold for use in the construction, industrial, water and wastewater handling fields; for flood control; for improving low residential water pressure, and for pumping refined petroleum products, including the ground refueling of aircraft, and for various agricultural purposes.

Ampco-Pittsburgh Company Profile

Ampco-Pittsburgh Corporation is engaged in manufacturing and selling specialty metal products and customized equipment utilized by industry throughout the world. The Company operates through two segments: the Forged and Cast Engineered Products segment, and the Air and Liquid Processing segment. The Forged and Cast Engineered Products segment consists of Union Electric Steel Corporation (Union Electric Steel or UES) and Union Electric Steel UK Limited (UES-UK). The Air and Liquid Processing segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (Air and Liquid), a subsidiary of the Company. Union Electric Steel produces ingot and forged products that service a range of industries across the globe. UES-UK produces cast rolls for hot and cold strip mills, medium/heavy section mills and plate mills in a range of iron and steel qualities.

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