Critical Comparison: Graco (NYSE:GGG) & CECO Environmental (NASDAQ:CECO)

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

Analyst Ratings

This is a summary of current ratings and price targets for Graco and CECO Environmental, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graco	0	5	2	0	2.29
CECO Environmental	1	1	8	0	2.70

Graco presently has a consensus target price of $94.75, indicating a potential upside of 17.88%. CECO Environmental has a consensus target price of $102.38, indicating a potential upside of 64.55%. Given CECO Environmental’s stronger consensus rating and higher probable upside, analysts clearly believe CECO Environmental is more favorable than Graco.

Volatility & Risk

Graco has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, CECO Environmental has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Graco	23.53%	19.54%	15.86%
CECO Environmental	-3.39%	7.36%	3.41%

Earnings & Valuation

This table compares Graco and CECO Environmental”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	5.82	$521.84 million	$3.18	25.28
CECO Environmental	$774.38 million	4.71	$50.05 million	($0.69)	-90.17

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

Insider and Institutional Ownership

93.9% of Graco shares are owned by institutional investors. Comparatively, 68.1% of CECO Environmental shares are owned by institutional investors. 2.2% of Graco shares are owned by insiders. Comparatively, 16.9% of CECO Environmental shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Graco beats CECO Environmental on 9 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 CECO Environmental

CECO Environmental Corp. provides critical solutions in industrial air quality, industrial water treatment, and energy transition solutions worldwide. It operates in two segments: Engineered Systems and Industrial Process Solutions. The company engineers, designs, manufactures, and installs non-metallic expansion joints and flow control products, including rubber expansion joints, ducting expansion joints, and industrial pinch and duck bill valves; membrane-based industrial water and wastewater treatment systems; and provides dust and fume extraction solutions comprising consultation, design, manufacturing, installation, and service, as well as water and wastewater treatment solutions. It offers engineered and configured products and solutions, including dampers and diverters, expansion joints, selective catalytic reduction systems, severe-service and industrial cyclones, dust collectors, thermal oxidizers, filtration systems, wet and dry scrubbers, separators and coalescers, water treatment packages, metallic and non-metallic pumps, industrial silencers, and fluid handling equipment, as well as plant engineering services and engineered design build fabrication services. In addition, the company offers industrial engineered noise control solutions, including custom acoustical gen-set packages, ambient air baffles, acoustical louvres, and skid enclosures; process filtration solutions for hydrocarbon and chemical processing; and energy and water conservation systems and equipment. The company markets its products and services to natural gas processors, transmission and distribution companies, refineries, power generators, industrial manufacturing, engineering and construction companies, semiconductor manufacturers, compressor manufacturers, beverage can manufacturers, metals and minerals, and electric vehicle producers. CECO Environmental Corp. was founded in 1869 and is headquartered in Dallas, Texas.