Head to Head Contrast: Atlas Copco (OTCMKTS:ATLKY) & Graham (NYSE:GHM)

Atlas Copco (OTCMKTS:ATLKY) and Graham (NYSE:GHM) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Dividends

Atlas Copco pays an annual dividend of $0.21 per share and has a dividend yield of 1.2%. Graham pays an annual dividend of $0.44 per share and has a dividend yield of 0.6%. Atlas Copco pays out 38.2% of its earnings in the form of a dividend. Graham pays out 32.6% 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.

Profitability

This table compares Atlas Copco and Graham’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlas Copco	15.70%	24.94%	13.21%
Graham	6.28%	13.26%	6.07%

Valuation and Earnings

This table compares Atlas Copco and Graham”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlas Copco	$17.21 billion	4.99	$2.70 billion	$0.55	32.02
Graham	$237.56 million	3.67	$12.23 million	$1.35	58.28

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

Risk & Volatility

Atlas Copco has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, Graham has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Atlas Copco and Graham, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlas Copco	1	4	4	0	2.33
Graham	0	3	3	0	2.50

Graham has a consensus target price of $81.67, suggesting a potential upside of 3.80%. Given Graham’s stronger consensus rating and higher probable upside, analysts clearly believe Graham is more favorable than Atlas Copco.

Institutional and Insider Ownership

0.0% of Atlas Copco shares are held by institutional investors. Comparatively, 69.5% of Graham shares are held by institutional investors. 6.0% of Graham shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Atlas Copco beats Graham on 9 of the 16 factors compared between the two stocks.

About Atlas Copco

Atlas Copco AB provides compressed air and gas, vacuum, energy, dewatering and industrial pump, industrial power tool, and assembly and machine vision solutions in North America, South America, Europe, Africa, the Middle East, Asia, and Oceania. It operates through Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique segments. The company offers piston compressors, oil-free tooth and scroll compressors, rotary screw compressors, oil-free blowers, oil-free centrifugal compressors, gas and process compressors, air and gas treatment equipment, expanders and pumps, and medical air solutions. It also provides oil-sealed rotary vane, dry, and liquid ring vacuum pumps; turbomolecular and cryogenic pumps; abatement and integrated systems; industrial assembly tools and solutions; self-pierce riveting solutions; adhesive dispensing and flow drill fastening equipment; material removal tools, and drills and other pneumatic products; machine vision solutions; construction and demolition tools; mobile compressors, generators, and energy storage systems; and industrial flow, portable power, portable flow, and portable air products, as well as specialty rental services. The company serves the semiconductor and flat panel, industrial manufacturing, civil engineering, demolition, exploration drilling, automotive, off-highway vehicles, electronics, aerospace, energy, food, pharmaceutical, textile, and other industries. Atlas Copco AB was founded in 1873 and is headquartered in Nacka, Sweden.

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.