Griffon (NYSE:GFF – Get Free Report) and Simpson Manufacturing (NYSE:SSD – Get Free Report) are both mid-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Griffon and Simpson Manufacturing, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Griffon | 0 | 1 | 1 | 2 | 3.25 |
| Simpson Manufacturing | 1 | 2 | 3 | 0 | 2.33 |
Griffon currently has a consensus price target of $122.50, indicating a potential upside of 17.59%. Simpson Manufacturing has a consensus price target of $216.25, indicating a potential upside of 11.81%. Given Griffon’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Griffon is more favorable than Simpson Manufacturing.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Griffon | $2.52 billion | 1.87 | $51.11 million | $3.92 | 26.57 |
| Simpson Manufacturing | $2.33 billion | 3.41 | $345.08 million | $9.15 | 21.14 |
Simpson Manufacturing has lower revenue, but higher earnings than Griffon. Simpson Manufacturing is trading at a lower price-to-earnings ratio than Griffon, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Griffon and Simpson Manufacturing’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Griffon | 8.08% | 249.31% | 12.64% |
| Simpson Manufacturing | 15.65% | 18.45% | 12.32% |
Risk and Volatility
Griffon has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.
Insider and Institutional Ownership
73.2% of Griffon shares are held by institutional investors. Comparatively, 93.7% of Simpson Manufacturing shares are held by institutional investors. 10.2% of Griffon shares are held by company insiders. Comparatively, 0.3% of Simpson Manufacturing shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Dividends
Griffon pays an annual dividend of $0.88 per share and has a dividend yield of 0.8%. Simpson Manufacturing pays an annual dividend of $1.20 per share and has a dividend yield of 0.6%. Griffon pays out 22.4% of its earnings in the form of a dividend. Simpson Manufacturing pays out 13.1% 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. Griffon has raised its dividend for 1 consecutive years and Simpson Manufacturing has raised its dividend for 11 consecutive years.
Summary
Griffon beats Simpson Manufacturing on 10 of the 18 factors compared between the two stocks.
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.
About Simpson Manufacturing
Simpson Manufacturing Co., Inc., through its subsidiaries, designs, engineers, manufactures, and sells structural solutions for wood, concrete, and steel connections. The company offers wood construction products, including connectors, truss plates, fastening systems, fasteners and shearwalls, and pre-fabricated lateral systems for use in light-frame construction; and concrete construction products comprising adhesives, specialty chemicals, mechanical anchors, carbide drill bits, powder actuated tools, fiber-reinforced materials, and other repair products for use in concrete, masonry, and steel construction, as well as grouts, coatings, sealers, mortars, fiberglass and fiber-reinforced polymer systems, and asphalt products for use in concrete construction repair, and strengthening and protection products. It also provides connectors and lateral products for wood framing, timber and offsite construction, structural steel construction, and cold-formed steel applications; and mechanical and adhesive anchors for concrete and masonry construction applications. In addition, the company offers engineering and design services, as well as software solutions that facilitate the specification, selection, and use of its products. It markets its products to the residential construction, light industrial and commercial construction, infrastructure construction, remodeling, and do-it-yourself markets in the United States, Canada, France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands, Belgium, Spain, Italy, Romania, Sweden, Norway, Australia, New Zealand, China, Taiwan, and Vietnam. The company was founded in 1956 and is headquartered in Pleasanton, California.
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