Critical Analysis: CVD Equipment (NASDAQ:CVV) and Graco (NYSE:GGG)

Graco (NYSE:GGG) and CVD Equipment (NASDAQ:CVV) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for Graco and CVD Equipment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graco	0	4	3	0	2.43
CVD Equipment	1	0	0	0	1.00

Graco presently has a consensus price target of $94.25, indicating a potential upside of 24.51%. Given Graco’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Graco is more favorable than CVD Equipment.

Risk and Volatility

Graco has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, CVD Equipment has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Insider and Institutional Ownership

93.9% of Graco shares are owned by institutional investors. Comparatively, 31.6% of CVD Equipment shares are owned by institutional investors. 2.2% of Graco shares are owned by insiders. Comparatively, 28.7% of CVD Equipment shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Graco and CVD Equipment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Graco	$2.24 billion	5.62	$521.84 million	$3.07	24.66
CVD Equipment	$25.79 million	1.40	-$1.59 million	($0.51)	-10.20

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Graco	22.96%	18.66%	15.22%
CVD Equipment	-18.68%	-14.18%	-12.37%

Summary

Graco beats CVD Equipment on 12 of the 14 factors compared between the two stocks.

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.

About CVD Equipment

CVD Equipment Corporation, together with its subsidiaries, designs, develops, manufactures, and sells equipment to develop and manufacture materials and coatings in the United States and internationally. It operates through three segments: CVD Equipment, Stainless Design Concepts, and CVD Materials. The CVD Equipment segment offers chemical vapor deposition, physical vapor transport, and thermal process equipment under the FirstNano brand for various markets, such as high power electronics, aerospace advanced materials for gas turbine jet engines, and nanomaterials used in batteries, as well as semiconductors, LEDs, carbon nanotubes, nanowires, solar cells, and other industrial and research applications. The Stainless Design Concepts segment provides ultra-high purity gas and chemical delivery control systems, including gas cylinder storage cabinets, custom gas and chemical delivery systems, gas and liquid valve manifold boxes, and gas isolation boxes for semiconductor fabrication processes, aerospace, solar cells, LEDs, carbon nanotubes, nanowires, and industrial applications. The CVD Materials segment offers products related to advanced materials and coatings, such as MesoPlasma printing services and products comprising heaters, antennas, and sensors to aerospace, satellite, power generation, defense, and other markets. The company also provides annealing, diffusion, and low pressure chemical vapor deposition furnaces; and standard and custom fabricated quartz-ware used in its equipment and other customer tools. The company was incorporated in 1982 and is headquartered in Central Islip, New York.