Critical Contrast: Xylem (XYL) and Gorman-Rupp Company (The) (GRC)
Xylem (NYSE: XYL) and Gorman-Rupp Company (The) (NYSE:GRC) are both pump & pumping equipment companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.
This is a breakdown of recent ratings and target prices for Xylem and Gorman-Rupp Company (The), as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gorman-Rupp Company (The)||0||0||0||0||N/A|
Xylem currently has a consensus target price of $64.64, indicating a potential downside of 2.69%. Given Xylem’s higher probable upside, research analysts plainly believe Xylem is more favorable than Gorman-Rupp Company (The).
Xylem pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Gorman-Rupp Company (The) pays an annual dividend of $0.50 per share and has a dividend yield of 1.6%. Xylem pays out 41.9% of its earnings in the form of a dividend. Gorman-Rupp Company (The) pays out 55.6% 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. Xylem has increased its dividend for 4 consecutive years and Gorman-Rupp Company (The) has increased its dividend for 44 consecutive years. Gorman-Rupp Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Xylem has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Gorman-Rupp Company (The) has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.
Valuation & Earnings
This table compares Xylem and Gorman-Rupp Company (The)’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Xylem||$3.77 billion||3.16||$260.00 million||$1.72||38.62|
|Gorman-Rupp Company (The)||$382.07 million||2.18||$24.88 million||$0.90||35.37|
Xylem has higher revenue and earnings than Gorman-Rupp Company (The). Gorman-Rupp Company (The) is trading at a lower price-to-earnings ratio than Xylem, indicating that it is currently the more affordable of the two stocks.
This table compares Xylem and Gorman-Rupp Company (The)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gorman-Rupp Company (The)||6.25%||9.72%||7.75%|
Institutional and Insider Ownership
86.1% of Xylem shares are held by institutional investors. Comparatively, 51.7% of Gorman-Rupp Company (The) shares are held by institutional investors. 0.8% of Xylem shares are held by insiders. Comparatively, 12.4% of Gorman-Rupp Company (The) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Xylem beats Gorman-Rupp Company (The) on 11 of the 16 factors compared between the two stocks.
Xylem Company Profile
Xylem Inc. is a water technology company. The Company designs, manufactures and services engineered solutions across a range of critical applications. It is an equipment and service provider for water and wastewater applications with a portfolio of products and services addressing the cycle of water, from collection, distribution and use to the return of water to the environment. It has three business segments, which include Water Infrastructure, Applied Water and Sensus. Water Infrastructure focuses on the transportation, treatment and testing of water, offering a range of products, including water and wastewater pumps, and controls and systems. Applied Water serves the uses of water and focuses on the residential, commercial, industrial and agricultural markets. The Sensus segment’s products include metering, networked communications, measurement and control technologies, software and services, including cloud-based analytics, remote monitoring and data management.
Gorman-Rupp Company (The) 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.
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