Generac (NYSE:GNRC) vs. Graco (NYSE:GGG) Head to Head Comparison

Generac (NYSE:GNRC) and Graco (NYSE:GGG) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Institutional and Insider Ownership

84.0% of Generac shares are owned by institutional investors. Comparatively, 93.9% of Graco shares are owned by institutional investors. 2.7% of Generac shares are owned by company insiders. Comparatively, 2.2% of Graco shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Generac	$4.30 billion	2.12	$325.26 million	$5.25	29.60
Graco	$2.11 billion	6.49	$486.08 million	$2.93	28.23

Graco has lower revenue, but higher earnings than Generac. Graco is trading at a lower price-to-earnings ratio than Generac, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Generac and Graco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Generac	6.92%	17.63%	8.50%
Graco	22.72%	18.89%	15.47%

Volatility and Risk

Generac has a beta of 1.82, suggesting that its share price is 82% more volatile than the S&P 500. Comparatively, Graco has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Generac and Graco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Generac	0	7	14	0	2.67
Graco	0	3	3	0	2.50

Generac presently has a consensus target price of $191.28, suggesting a potential upside of 23.10%. Graco has a consensus target price of $94.00, suggesting a potential upside of 13.66%. Given Generac’s stronger consensus rating and higher probable upside, analysts plainly believe Generac is more favorable than Graco.

Summary

Generac beats Graco on 8 of the 14 factors compared between the two stocks.

About Generac

Generac Holdings Inc. designs, manufactures, and distributes various energy technology products and solution worldwide. The company offers residential automatic standby generators, automatic transfer switch, air-cooled engine residential standby generators, and liquid-cooled engine generators; Mobile Link, a remote monitoring system for home standby generators; residential storage solution, which consists of a system of batteries, an inverter, photovoltaic optimizers, power electronic controls, and other components; smart home solutions, such as smart thermostats and a suite of home monitoring products. It also provides smart home energy management devices and sensors for heating and cooling system; smart doorbell cameras; and portable and inverter generators; multiple portable battery solutions; manual transfer switches; outdoor power equipment, including trimmers, field and brush mowers, log splitters, stump grinders, chipper shredders, lawn and leaf vacuums, and pressure washers and water pumps; and battery-powered turf care products. In addition, the company offers commercial and industrial products comprising cleaner-burning natural gas fueled generators; light-commercial standby generators and related transfer switches; stationary generators; single-engine industrial generators; industrial standby generators; industrial transfer switches; light towers, mobile generators, commercial mobile pumps, heaters, dust-suppression equipment, and mobile energy storage systems; stationary energy storage system and related inverter products; and aftermarket service parts and product accessories. The company distributes its products through independent residential dealers, industrial distributors and dealers, national and regional retailers, e-commerce partners, electrical/HVAC/solar wholesalers, solar installers, catalogs, equipment rental companies, and other equipment distributors; and directly to end users. The company was founded in 1959 and is headquartered in Waukesha, Wisconsin.

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.