Reviewing Graham (GHM) and The Competition

Graham (NYSE:GHM) is one of 436 publicly-traded companies in the “Machinery” industry, but how does it contrast to its peers? We will compare Graham to related companies based on the strength of its analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Insider & Institutional Ownership

69.5% of Graham shares are owned by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are owned by institutional investors. 2.4% of Graham shares are owned by company insiders. Comparatively, 14.1% of shares of all “Machinery” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Graham has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Graham’s peers have a beta of 4.69, meaning that their average share price is 369% more volatile than the S&P 500.

Profitability

This table compares Graham and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Graham	4.53%	11.09%	5.17%
Graham Competitors	-1,044.45%	-15.01%	0.54%

Earnings and Valuation

This table compares Graham and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Graham	$245.29 million	$12.50 million	68.04
Graham Competitors	$4.74 billion	$363.05 million	3.62

Graham’s peers have higher revenue and earnings than Graham. Graham is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of current ratings and price targets for Graham and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graham	0	2	3	0	2.60
Graham Competitors	4194	14687	18187	803	2.41

Graham currently has a consensus price target of $123.33, suggesting a potential upside of 74.30%. As a group, “Machinery” companies have a potential upside of 29.91%. Given Graham’s stronger consensus rating and higher possible upside, equities analysts plainly believe Graham is more favorable than its peers.

Summary

Graham beats its peers on 8 of the 13 factors compared.

Graham Company Profile

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.