Contrasting Gorman-Rupp (NYSE:GRC) and Generac (NYSE:GNRC)

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

Profitability

This table compares Generac and Gorman-Rupp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Generac	4.37%	15.45%	7.35%
Gorman-Rupp	8.88%	15.80%	7.59%

Volatility & Risk

Generac has a beta of 1.89, indicating that its stock price is 89% more volatile than the S&P 500. Comparatively, Gorman-Rupp has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Institutional and Insider Ownership

84.0% of Generac shares are held by institutional investors. Comparatively, 59.3% of Gorman-Rupp shares are held by institutional investors. 2.4% of Generac shares are held by insiders. Comparatively, 11.6% of Gorman-Rupp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Generac and Gorman-Rupp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Generac	0	6	12	1	2.74
Gorman-Rupp	0	1	1	1	3.00

Generac currently has a consensus price target of $286.44, suggesting a potential upside of 41.71%. Given Generac’s higher probable upside, equities research analysts clearly believe Generac is more favorable than Gorman-Rupp.

Earnings & Valuation

This table compares Generac and Gorman-Rupp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Generac	$4.21 billion	2.83	$159.55 million	$3.19	63.36
Gorman-Rupp	$682.39 million	3.16	$53.02 million	$2.23	36.66

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

Summary

Generac beats Gorman-Rupp 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 Gorman-Rupp

The Gorman-Rupp Company designs, manufactures, and sells pumps and pump systems in the United States and internationally. The company’s products include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, high-pressure booster, rotary gear, diaphragm, bellows, and oscillating pumps. Its products are used in water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire suppression, heating, ventilating and air conditioning, military, and other liquid-handling applications. The company markets its products through a network of distributors, manufacturers’ representatives, third-party distributor catalogs, direct sales, and e-commerce. The Gorman-Rupp Company was founded in 1933 and is headquartered in Mansfield, Ohio.