Critical Survey: Carlisle Companies (NYSE:CSL) versus Griffon (NYSE:GFF)

Carlisle Companies (NYSE:CSL) and Griffon (NYSE:GFF) are both multi-sector conglomerates companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Insider & Institutional Ownership

89.5% of Carlisle Companies shares are owned by institutional investors. Comparatively, 73.2% of Griffon shares are owned by institutional investors. 1.5% of Carlisle Companies shares are owned by insiders. Comparatively, 10.2% of Griffon shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Carlisle Companies and Griffon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carlisle Companies	15.48%	40.26%	15.14%
Griffon	2.03%	181.66%	11.95%

Analyst Ratings

This is a summary of current ratings and price targets for Carlisle Companies and Griffon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carlisle Companies	1	5	4	0	2.30
Griffon	1	1	3	3	3.00

Carlisle Companies currently has a consensus target price of $386.67, suggesting a potential upside of 8.85%. Griffon has a consensus target price of $95.60, suggesting a potential upside of 17.88%. Given Griffon’s stronger consensus rating and higher possible upside, analysts plainly believe Griffon is more favorable than Carlisle Companies.

Earnings & Valuation

This table compares Carlisle Companies and Griffon”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carlisle Companies	$5.00 billion	2.97	$1.31 billion	$17.63	20.15
Griffon	$2.52 billion	1.49	$51.11 million	$1.00	81.10

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

Dividends

Carlisle Companies pays an annual dividend of $4.40 per share and has a dividend yield of 1.2%. Griffon pays an annual dividend of $0.88 per share and has a dividend yield of 1.1%. Carlisle Companies pays out 25.0% of its earnings in the form of a dividend. Griffon pays out 88.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Carlisle Companies has raised its dividend for 48 consecutive years and Griffon has raised its dividend for 1 consecutive years. Carlisle Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Carlisle Companies has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Griffon has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.

Summary

Carlisle Companies beats Griffon on 11 of the 18 factors compared between the two stocks.

About Carlisle Companies

Carlisle Companies Incorporated operates as a manufacturer and supplier of building envelope products and solutions in the United States, Europe, North America, Asia and the Middle East, Africa, and internationally. It operates through two segments: Carlisle Construction Materials and Carlisle Weatherproofing Technologies. The company produces single-ply roofing products, and warranted roof systems and accessories, including ethylene propylene diene monomer, thermoplastic polyolefin and polyvinyl chloride membrane, polyiso insulation, and engineered metal roofing and wall panel systems for commercial and residential buildings. It also offers building envelope solutions, including high-performance waterproofing and moisture protection products, protective roofing underlayments, fully integrated liquid and sheet applied air/vapor barriers, sealants/primers and flashing systems, roof coatings and mastics, spray polyurethane foam and coating systems, block-molded expanded polystyrene insulation, and engineered products for HVAC applications. It sells its products under the Carlisle SynTec, Versico, WeatherBond, Hunter Panels, Resitrix, and Hertalan brands. Carlisle Companies Incorporated was founded in 1917 and is headquartered in Scottsdale, Arizona.

About Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.