Financial Analysis: Sandvik (OTCMKTS:SDVKY) & Graham (NYSE:GHM)

Sandvik (OTCMKTS:SDVKY) and Graham (NYSE:GHM) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Sandvik and Graham’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sandvik	13.05%	18.45%	9.99%
Graham	4.53%	11.09%	5.17%

Valuation & Earnings

This table compares Sandvik and Graham”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sandvik	$12.34 billion	3.55	$1.50 billion	$1.45	24.10
Graham	$245.29 million	3.14	$12.50 million	$1.04	63.15

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Sandvik and Graham, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sandvik	1	6	5	0	2.33
Graham	0	2	3	0	2.60

Graham has a consensus target price of $123.33, indicating a potential upside of 87.78%. Given Graham’s stronger consensus rating and higher probable upside, analysts clearly believe Graham is more favorable than Sandvik.

Risk & Volatility

Sandvik has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, Graham has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Institutional & Insider Ownership

0.7% of Sandvik shares are held by institutional investors. Comparatively, 69.5% of Graham shares are held by institutional investors. 2.4% of Graham shares are held by company 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

Sandvik beats Graham on 9 of the 14 factors compared between the two stocks.

About Sandvik

Sandvik AB (publ), an engineering company, provides products and solutions for mining and rock excavation, metal cutting, and materials technology worldwide. The company offers mining and rock excavation equipment, including drill rigs and bolters, underground loaders and trucks, mechanical cutting equipment, rock tools and rock drills, and mining automation; rock processing equipment, such as crushers, screens, hydraulic breakers, demolition tools, and breaker booms. It also provides metal-cutting tools and tooling systems, and digital solutions and software; metal powder for additive manufacturing, and components made from controlled expansion alloys; and tungsten powders, as well as recycling services of secondary tungsten raw materials. The company serves aerospace, automotive, energy, general engineering, infrastructure, and mining industries. Sandvik AB (publ) was founded in 1862 and is headquartered in Stockholm, Sweden.

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.