Analyzing GrafTech International (NYSE:EAF) and ESAB (NYSE:ESAB)

ESAB (NYSE:ESAB) and GrafTech International (NYSE:EAF) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Earnings and Valuation

This table compares ESAB and GrafTech International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ESAB	$2.74 billion	2.49	$264.84 million	$4.18	26.87
GrafTech International	$538.78 million	0.49	-$131.16 million	($0.82)	-1.24

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

Risk and Volatility

ESAB has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, GrafTech International has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for ESAB and GrafTech International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ESAB	0	3	5	0	2.63
GrafTech International	0	5	0	0	2.00

ESAB currently has a consensus price target of $137.8750, indicating a potential upside of 22.76%. GrafTech International has a consensus price target of $1.6250, indicating a potential upside of 60.10%. Given GrafTech International’s higher probable upside, analysts plainly believe GrafTech International is more favorable than ESAB.

Institutional and Insider Ownership

91.1% of ESAB shares are held by institutional investors. Comparatively, 92.8% of GrafTech International shares are held by institutional investors. 7.3% of ESAB shares are held by insiders. Comparatively, 1.0% of GrafTech International shares are held 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.

Profitability

This table compares ESAB and GrafTech International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ESAB	9.36%	16.32%	7.54%
GrafTech International	-41.64%	N/A	-12.27%

Summary

ESAB beats GrafTech International on 11 of the 14 factors compared between the two stocks.

About ESAB

ESAB Corporation engages in the formulation, development, manufacture, and supply of consumable products and equipment for use in cutting, joining, automated welding, and gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables comprising electrodes, nozzles, shields, and tips. The company's equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of software and digital solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, such as general industry, infrastructure, renewable energy, medical and life sciences, transportation, construction, and energy. It offers its products through independent distributors and direct salespeople. The company operates in North America, South America, Europe, the Middle East, India, Africa, and the Asia Pacific. ESAB Corporation was founded in 1904 and is headquartered in North Bethesda, Maryland.

About GrafTech International

GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide. The company offers graphite electrodes to produce electric arc furnace steel and other ferrous and non-ferrous metals; and petroleum needle coke, a crystalline form of carbon used in the production of graphite electrodes and synthetic graphite. It sells its products primarily through direct sales force, independent sales representatives, and distributors. GrafTech International Ltd. was founded in 1886 and is headquartered in Brooklyn Heights, Ohio.