Analyzing Graham (NYSE:GHM) and Japan Steel Works (OTCMKTS:JPSWY)

Graham (NYSE:GHM) and Japan Steel Works (OTCMKTS:JPSWY) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Earnings and Valuation

This table compares Graham and Japan Steel Works”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Graham	$209.90 million	5.46	$12.23 million	$1.35	72.69
Japan Steel Works	$1.63 billion	2.82	$118.54 million	$0.93	33.60

Japan Steel Works has higher revenue and earnings than Graham. Japan Steel Works is trading at a lower price-to-earnings ratio than Graham, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Graham and Japan Steel Works’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Graham	6.28%	13.26%	6.07%
Japan Steel Works	7.41%	8.81%	4.39%

Risk and Volatility

Graham has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Japan Steel Works has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Graham and Japan Steel Works, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graham	0	2	3	1	2.83
Japan Steel Works	0	1	1	0	2.50

Graham presently has a consensus price target of $81.67, indicating a potential downside of 16.78%. Given Graham’s stronger consensus rating and higher probable upside, research analysts clearly believe Graham is more favorable than Japan Steel Works.

Insider & Institutional Ownership

69.5% of Graham shares are held by institutional investors. 6.0% of Graham shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Graham beats Japan Steel Works on 12 of the 15 factors compared between the two stocks.

About Graham

Graham Corporation, together with its subsidiaries, designs and manufactures fluid, power, heat transfer, and vacuum equipment for chemical and petrochemical processing, defense, space, petroleum refining, cryogenic, energy, and other industries. It offers power plant systems, including ejectors and surface condensers; torpedo ejection, propulsion, and power systems, such as turbines, alternators, regulators, pumps, and blowers; and thermal management systems comprising pumps, blowers, and drive electronics for defense sector. The company also provides rocket propulsion systems consisting of turbopumps and fuel pumps; cooling systems, which include pumps, compressors, fans, and blowers; and life support systems that comprise fans, pumps, and blowers for space industry. In addition, it offers heat transfer and vacuum systems, including ejectors, process and surface condensers, liquid ring pumps, heat exchangers, and nozzles; power generation systems, such as turbines, generators, compressors, and pumps; and thermal management systems comprising pumps, blowers, and electronics for energy sector. Further, the company offers heat transfer and vacuum systems consisting of ejectors, process and surface condensers, liquid ring pumps, heat exchangers, and nozzles for chemical and petrochemical processing industry. The company also services and sells spare parts for its equipment. It sells its products directly in the United States, the Middle East, Canada, Asia, South America, and internationally. Graham Corporation was founded in 1936 and is headquartered in Batavia, New York.

About Japan Steel Works

The Japan Steel Works, Ltd. engages in the provision of industrial machinery products, and material and engineering business in Japan and internationally. It operates through Industrial Machinery Products Business, and Material and Engineering Business segments. The Industrial Machinery Products Business segment offers plastic production and processing machinery, such as pelletizers, film and sheet manufacturing equipment, and twin-screw extruders; molding machines including plastic injection molding, magnesium injection molding, and blow molding machines; and other machinery consists of excimer laser annealing systems, defense equipment, railway products, hot press devices, vacuum laminators, and deposit systems, as well as after-sales services for plastics, mobility, high-performance batteries, electronic devices, and defense applications. The Material and Engineering Business segment provides steel casting and forgings, such as reactor and steam generator parts, rotor shafts, turbine casings, die steel, steel rolls for steel manufacturing, and clad steel plates; and engineering and other services, including design and analysis, welded structures, inspection and survey, and hydrogen pressure accumulators and related products for use in power generation equipment, renewable energy, and infrastructure applications. The company offers photonics, composite materials, and metallic materials for use in semiconductors and electronic devices, cameras and sensing devices, aircraft and mobility components, and electronic parts. The Japan Steel Works, Ltd. was founded in 1907 and is headquartered in Shinagawa, Japan.