Grafton Group (OTCMKTS:GROUF) & Knife River (NYSE:KNF) Critical Review

Knife River (NYSE:KNF) and Grafton Group (OTCMKTS:GROUF) are both mid-cap construction companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Profitability

This table compares Knife River and Grafton Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Knife River	4.99%	10.27%	4.41%
Grafton Group	N/A	N/A	N/A

Earnings & Valuation

This table compares Knife River and Grafton Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Knife River	$3.15 billion	1.56	$157.07 million	$2.76	31.30
Grafton Group	$3.32 billion	0.73	$180.07 million	N/A	N/A

Grafton Group has higher revenue and earnings than Knife River.

Volatility and Risk

Knife River has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, Grafton Group has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Knife River and Grafton Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Knife River	1	3	6	0	2.50
Grafton Group	0	0	1	0	3.00

Knife River currently has a consensus target price of $97.43, suggesting a potential upside of 12.76%. Given Knife River’s higher possible upside, equities analysts plainly believe Knife River is more favorable than Grafton Group.

Insider and Institutional Ownership

80.1% of Knife River shares are owned by institutional investors. Comparatively, 8.2% of Grafton Group shares are owned by institutional investors. 0.3% of Knife River shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Knife River beats Grafton Group on 8 of the 12 factors compared between the two stocks.

About Knife River

Knife River Corporation, together with its subsidiaries, provides aggregates- led construction materials and contracting services in the United States. It operates through Pacific, Northwest, Mountain, Central, and Energy Services segments. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete. It also provides contracting service, such as heavy-civil construction, asphalt and concrete paving, and site development and grading. In addition, the company sells cement, merchandise, and other building materials and related services. The company sells its construction materials to public and private-sector customers, including federal, state, and municipal governments, as well as industrial, commercial and residential developers, and other private parties; and provides its contracting services to public-sector customers for the development and servicing of highways, local roads, bridges, and other public-infrastructure projects. Knife River Corporation was founded in 1917 and is based in Bismarck, North Dakota.

About Grafton Group

Grafton Group plc engages in the distribution, retailing, and manufacturing businesses in Ireland, the Netherlands, Finland, and the United Kingdom. Its Distribution segment distributes building materials, paint, tools, ironmongery, fixings, and accessories, workwear and PPE, and spare parts; materials and plant for mechanical services, heating, plumbing, and air movement; and trade, DIY, and self-build markets with building materials, timber, doors and floors, plumbing and heating, bathrooms, and landscaping products under the Selco, Leyland SDM, Chadwicks, MacBlair, Isero, Polvo, Gunters en Meuser, TG Lynes, and IKH brands. The company’s Retailing segment retails home and garden products through stores, including DIY products, paints, lighting products, homestyle products, housewares, bathroom products, and kitchens, as well as gardening and Christmas products under the Woodie’s brand. Its Manufacturing segment manufactures dry mortars and wooden staircases; and drainage, ducting and roofline systems under the CPI Mortar, StairBox, and MFP brand names. Grafton Group plc was founded in 1902 and is based in Dublin, Ireland.