Graco (NYSE:GGG – Get Free Report) and Otis Worldwide (NYSE:OTIS – Get Free Report) are both large-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.
Profitability
This table compares Graco and Otis Worldwide’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Graco | 23.33% | 19.49% | 15.89% |
| Otis Worldwide | 9.59% | -30.42% | 14.84% |
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Graco and Otis Worldwide, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Graco | 0 | 3 | 4 | 0 | 2.57 |
| Otis Worldwide | 1 | 6 | 3 | 0 | 2.20 |
Insider & Institutional Ownership
93.9% of Graco shares are owned by institutional investors. Comparatively, 88.0% of Otis Worldwide shares are owned by institutional investors. 2.2% of Graco shares are owned by insiders. Comparatively, 0.2% of Otis Worldwide shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Graco and Otis Worldwide”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Graco | $2.24 billion | 6.47 | $521.84 million | $3.09 | 28.34 |
| Otis Worldwide | $14.43 billion | 2.24 | $1.38 billion | $3.50 | 23.76 |
Otis Worldwide has higher revenue and earnings than Graco. Otis Worldwide is trading at a lower price-to-earnings ratio than Graco, indicating that it is currently the more affordable of the two stocks.
Dividends
Graco pays an annual dividend of $1.18 per share and has a dividend yield of 1.3%. Otis Worldwide pays an annual dividend of $1.68 per share and has a dividend yield of 2.0%. Graco pays out 38.2% of its earnings in the form of a dividend. Otis Worldwide pays out 48.0% 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. Graco has raised its dividend for 29 consecutive years and Otis Worldwide has raised its dividend for 5 consecutive years.
Risk & Volatility
Graco has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Otis Worldwide has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.
Summary
Graco beats Otis Worldwide on 12 of the 17 factors compared between the two stocks.
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.
About Otis Worldwide
Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.
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