Valmont Industries (NYSE:VMI – Get Free Report) and Graco (NYSE:GGG – Get Free Report) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Dividends
Valmont Industries pays an annual dividend of $3.08 per share and has a dividend yield of 0.7%. Graco pays an annual dividend of $1.18 per share and has a dividend yield of 1.5%. Valmont Industries pays out 12.0% of its earnings in the form of a dividend. Graco pays out 37.1% 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. Valmont Industries has increased its dividend for 1 consecutive years and Graco has increased its dividend for 29 consecutive years. Graco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Valmont Industries and Graco”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Valmont Industries | $4.10 billion | 2.22 | $334.78 million | $25.68 | 18.41 |
| Graco | $2.24 billion | 5.54 | $521.84 million | $3.18 | 24.07 |
Graco has lower revenue, but higher earnings than Valmont Industries. Valmont Industries is trading at a lower price-to-earnings ratio than Graco, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Valmont Industries has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Graco has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for Valmont Industries and Graco, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Valmont Industries | 0 | 2 | 4 | 0 | 2.67 |
| Graco | 0 | 5 | 2 | 0 | 2.29 |
Valmont Industries currently has a consensus target price of $587.00, suggesting a potential upside of 24.19%. Graco has a consensus target price of $95.00, suggesting a potential upside of 24.13%. Given Valmont Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Valmont Industries is more favorable than Graco.
Profitability
This table compares Valmont Industries and Graco’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Valmont Industries | 11.70% | 25.57% | 12.44% |
| Graco | 23.53% | 19.54% | 15.86% |
Insider and Institutional Ownership
87.8% of Valmont Industries shares are held by institutional investors. Comparatively, 93.9% of Graco shares are held by institutional investors. 1.4% of Valmont Industries shares are held by insiders. Comparatively, 2.2% of Graco shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Graco beats Valmont Industries on 9 of the 17 factors compared between the two stocks.
About Valmont Industries
Valmont Industries, Inc. operates as manufacturer of products and services for infrastructure and agriculture markets in the United States, Australia, Brazil, and internationally. It operates through two segments, Infrastructure and Agriculture. The company manufactures and distributes steel, pre-stressed concrete, composite structures for electrical transmission, substation, and distribution applications; and designs, engineers, and manufactures metal, steel, wood, aluminum, and composite poles and structures for lighting and transportation applications. It also offers galvanizing, anodizing, painting, and powder coating services for paint products; towers, small cell structures, camouflage concealment solutions, passive intermodulation mitigation equipment, and components for wireless communication markets; and solar single-axis tracker product, an integrated system of steel structures, electric motors, and electronic controllers, as well as provides coatings services to preserve metal products. In addition, the company manufactures center pivot components and linear irrigation equipment for the agricultural markets, such as parts and tubular products for industrial customers; advanced technology solutions for agricultural sector; mechanical irrigation equipment and service parts under the Valley brand name. It serves municipalities and government entities, commercial lighting fixtures manufacturing companies, contractors, telecommunications and utility companies, and farmers, as well as the general manufacturing sector. Valmont Industries, Inc. was founded in 1946 and is headquartered in Omaha, Nebraska.
About Graco
Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The Contractor segment offers sprayers to apply paint to walls and other structures; two-component proportioning systems that are used to spray polyurethane foam and polyurea coatings; and viscous coatings to roofs, as well as markings on roads, parking lots, athletic fields, and floors. The Industrial segment provides liquid finishing equipment, paint circulating and supply pumps, paint circulating advanced control systems, plural component coating proportioners, and accessories and spare parts; equipment that pumps, meters, mixes and dispenses sealant, adhesive, and composite materials; and gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators, and precision dispensing solutions. It also offers powder finishing products to coat powder finishing on metals under the Gema and SAT brands. The Process segment provides pumps to move and dispense chemicals, water, wastewater, petroleum, food, lubricants, and other fluids; pressure valves used in the oil and natural gas industry, other industrial processes, and research facilities; and chemical injection pumping solutions for injection of chemicals into producing oil wells and pipelines. It also supplies pumps, hose reels, meters, valves, and accessories for fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators in industrial and commercial equipment, compressors, turbines, and on- and off-road vehicles. It sells its products through distributors, original equipment manufacturers, and home center channels, as well as to end-users. The company was incorporated in 1926 and is headquartered in Minneapolis, Minnesota.
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