Gorman-Rupp (NYSE:GRC) vs. Komatsu (OTCMKTS:KMTUY) Financial Review

Komatsu (OTCMKTS:KMTUY) and Gorman-Rupp (NYSE:GRC) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Profitability

This table compares Komatsu and Gorman-Rupp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Komatsu	8.93%	10.51%	5.93%
Gorman-Rupp	8.88%	15.55%	7.59%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Komatsu and Gorman-Rupp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Komatsu	0	1	0	0	2.00
Gorman-Rupp	0	2	1	0	2.33

Insider & Institutional Ownership

0.2% of Komatsu shares are held by institutional investors. Comparatively, 59.3% of Gorman-Rupp shares are held by institutional investors. 2.9% of Komatsu shares are held by company insiders. Comparatively, 11.6% of Gorman-Rupp shares are held by company 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.

Risk & Volatility

Komatsu has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Gorman-Rupp has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Earnings and Valuation

This table compares Komatsu and Gorman-Rupp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Komatsu	$27.45 billion	1.55	$2.48 billion	$2.73	16.72
Gorman-Rupp	$682.39 million	2.75	$53.02 million	$2.37	30.03

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

Dividends

Komatsu pays an annual dividend of $0.89 per share and has a dividend yield of 2.0%. Gorman-Rupp pays an annual dividend of $0.76 per share and has a dividend yield of 1.1%. Komatsu pays out 32.6% of its earnings in the form of a dividend. Gorman-Rupp pays out 32.1% 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. Gorman-Rupp has raised its dividend for 52 consecutive years.

Summary

Gorman-Rupp beats Komatsu on 11 of the 16 factors compared between the two stocks.

About Komatsu

Komatsu Ltd. manufactures and sells construction, mining, and utility equipment in Japan, the Americas, Europe, China, Rest of Asia, Oceania, the Middle East, Africa, and CIS countries. It operates through three segments: Construction, Mining and Utility Equipment; Retail Finance; and Industrial Machinery and Others. The company offers construction and mining equipment, including excavators, wheel loaders, bulldozers, motor graders, dump truck, rope and hybrid shovels, electric wheel loaders, continuous miners, and jumbo drills. It also provides forestry equipment, including harvesters, forwarders, feller bunchers, excavators, mini excavators, and forklifts; demolition, waste, and recycling equipment, such as mobile crushers, hydraulic excavators, wheel loaders, and mini shovels; material handling equipment; and tunnel-boring machines, pipe layers, towing tractors, and engines. In addition, the company offers industrial machinery, including presses, sheet-metal machinery, 3D laser cutting machine, transfer machines, battery manufacturing equipment, wire saws, thermos modules, thermoelectric generation module, and temperature control products; quarry equipment; agricultural and livestock equipment; EH sensor device; iron and steel casting products; and logistics equipment. Further, the company provides retail financing; construction machinery rental services; remanufactured products; other support services; transportation, warehousing, packing, and other services; and purchases and sells used equipment. Komatsu Ltd. was founded in 1884 and is headquartered in Tokyo, Japan.

About Gorman-Rupp

The Gorman-Rupp Company designs, manufactures, and sells pumps and pump systems in the United States and internationally. The company’s products include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, high-pressure booster, rotary gear, diaphragm, bellows, and oscillating pumps. Its products are used in water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire suppression, heating, ventilating and air conditioning, military, and other liquid-handling applications. The company markets its products through a network of distributors, manufacturers’ representatives, third-party distributor catalogs, direct sales, and e-commerce. The Gorman-Rupp Company was founded in 1933 and is headquartered in Mansfield, Ohio.