Head to Head Survey: Proto Labs (NYSE:PRLB) and Graham (NYSE:GHM)

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

Volatility and Risk

Graham has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Proto Labs has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Institutional & Insider Ownership

69.5% of Graham shares are owned by institutional investors. Comparatively, 84.5% of Proto Labs shares are owned by institutional investors. 2.4% of Graham shares are owned by company insiders. Comparatively, 1.3% of Proto Labs shares are owned by company 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.

Profitability

This table compares Graham and Proto Labs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Graham	4.53%	11.09%	5.17%
Proto Labs	5.44%	4.80%	4.22%

Valuation & Earnings

This table compares Graham and Proto Labs”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Graham	$245.29 million	4.17	$12.50 million	$1.04	83.75
Proto Labs	$560.54 million	3.82	$21.24 million	$1.25	71.56

Proto Labs has higher revenue and earnings than Graham. Proto Labs 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 recommendations and price targets for Graham and Proto Labs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graham	0	3	2	0	2.40
Proto Labs	0	0	3	1	3.25

Graham presently has a consensus price target of $132.50, suggesting a potential upside of 52.12%. Proto Labs has a consensus price target of $89.00, suggesting a potential downside of 0.50%. Given Graham’s higher possible upside, equities research analysts plainly believe Graham is more favorable than Proto Labs.

Summary

Proto Labs beats Graham on 9 of the 15 factors compared between the two stocks.

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.

About Proto Labs

Proto Labs, Inc., together with its subsidiaries, operates as a digital manufacturer of custom parts in the United States and Europe. The company offers injection molding; computer numerical control machining; three-dimensional printing; and sheet metal fabrication products. It serves developers and engineers, who use 3D computer-aided design software to design products across a range of end-markets. Proto Labs, Inc. was incorporated in 1999 and is headquartered in Maple Plain, Minnesota.