Contrasting Ingersoll Rand (NYSE:IR) and Gorman-Rupp (NYSE:GRC)

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

Volatility & Risk

Gorman-Rupp has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, Ingersoll Rand has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Earnings and Valuation

This table compares Gorman-Rupp and Ingersoll Rand”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gorman-Rupp	$659.67 million	2.00	$40.12 million	$1.91	26.32
Ingersoll Rand	$7.46 billion	4.32	$838.60 million	$1.35	60.35

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

Institutional & Insider Ownership

59.3% of Gorman-Rupp shares are held by institutional investors. Comparatively, 95.3% of Ingersoll Rand shares are held by institutional investors. 11.3% of Gorman-Rupp shares are held by insiders. Comparatively, 0.7% of Ingersoll Rand shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for Gorman-Rupp and Ingersoll Rand, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gorman-Rupp	0	0	1	0	3.00
Ingersoll Rand	0	7	4	0	2.36

Ingersoll Rand has a consensus target price of $91.44, suggesting a potential upside of 12.25%. Given Ingersoll Rand’s higher probable upside, analysts plainly believe Ingersoll Rand is more favorable than Gorman-Rupp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gorman-Rupp	7.41%	13.49%	6.10%
Ingersoll Rand	7.31%	12.14%	6.88%

Dividends

Gorman-Rupp pays an annual dividend of $0.76 per share and has a dividend yield of 1.5%. Ingersoll Rand pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. Gorman-Rupp pays out 39.8% of its earnings in the form of a dividend. Ingersoll Rand pays out 5.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Gorman-Rupp has increased its dividend for 52 consecutive years. Gorman-Rupp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ingersoll Rand beats Gorman-Rupp on 10 of the 17 factors compared between the two stocks.

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.

About Ingersoll Rand

Ingersoll Rand Inc. provides various mission-critical air, gas, liquid, and solid flow creation technologies services and solutions worldwide. It operates through two segments, Industrial Technologies and Services, and Precision and Science Technologies. The Industrial Technologies and Services segment designs, manufactures, markets, and services air and gas compression, vacuum, and blower products; fluid transfer equipment and loading systems; and power tools and lifting equipment, including associated aftermarket parts, consumables, air treatment equipment, controls, other accessories, and services under the under the Ingersoll Rand, Gardner Denver, Nash, CompAir, Elmo Rietschle brands, etc. The Precision and Science Technologies segment designs, manufactures, and markets diaphragm, piston, water-powered, peristaltic, gear, vane, progressive cavity, and syringe pumps; and gas boosters, hydrogen compression systems, automated liquid handling systems, odorant injection systems, controls, software, and other related components and accessories for liquid and gas dosing, transfer, dispensing, compression, sampling, pressure management, and flow control in specialized or critical applications under the Air Dimensions, Albin, ARO, Dosatron, Haskel, Ingersoll Rand, LMI, Maximus, Milton Roy, MP, Oberdorfer, Seepex, Thomas, Welch, Williams, YZ, and Zinnser Analytic brand names. This segment's products are used in medical, life sciences, industrial manufacturing, water and wastewater, chemical processing, energy, food and beverage, agriculture, and other markets. It sells through an integrated network of direct sales representatives and independent distributors. The company was formerly known as Gardner Denver Holdings, Inc. and changed its name to Ingersoll Rand Inc. in March 2020. Ingersoll Rand Inc. was founded in 1859 and is headquartered in Davidson, North Carolina.