Financial Survey: Gorman-Rupp (GRC) versus IDEX (IEX)
Gorman-Rupp (NYSE: GRC) and IDEX (NYSE:IEX) are both industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.
Volatility and Risk
Gorman-Rupp has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, IDEX has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.
This table compares Gorman-Rupp and IDEX’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Gorman-Rupp pays an annual dividend of $0.50 per share and has a dividend yield of 1.5%. IDEX pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Gorman-Rupp pays out 55.6% of its earnings in the form of a dividend. IDEX pays out 37.9% 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. Gorman-Rupp has raised its dividend for 44 consecutive years and IDEX has raised its dividend for 7 consecutive years. Gorman-Rupp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and target prices for Gorman-Rupp and IDEX, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
IDEX has a consensus price target of $110.63, suggesting a potential downside of 16.51%. Given IDEX’s higher possible upside, analysts clearly believe IDEX is more favorable than Gorman-Rupp.
Valuation & Earnings
This table compares Gorman-Rupp and IDEX’s top-line 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||2.28||$24.88 million||$0.90||37.01|
|IDEX||$2.11 billion||4.79||$271.10 million||$3.90||33.97|
IDEX has higher revenue and earnings than Gorman-Rupp. IDEX is trading at a lower price-to-earnings ratio than Gorman-Rupp, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
52.7% of Gorman-Rupp shares are owned by institutional investors. Comparatively, 97.0% of IDEX shares are owned by institutional investors. 12.4% of Gorman-Rupp shares are owned by insiders. Comparatively, 1.0% of IDEX shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
IDEX beats Gorman-Rupp on 12 of the 16 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.
IDEX Company Profile
IDEX Corporation (IDEX) operates an applied solutions business that sells pumps, flow meters and other fluidics systems, and components and engineered products. The Company operates through three segments: Fluid & Metering Technologies (FMT), Health & Science Technologies (HST) and Fire & Safety/Diversified Products (FSDP). With its segments, as of December 31, 2016, the Company maintained 13 platforms, where it focused on growth and acquisitions. The Company’s FMT segment provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agricultural and energy industries. The HST segment designs, produces and distributes precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems. Its FSDP segment produces firefighting pumps and controls, rescue tools, lifting bags and other components and systems; engineered stainless steel banding and clamping devices, and precision equipment.
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