Analyzing Graco (NYSE:GGG) and Kone Oyj (OTCMKTS:KNYJY)

Kone Oyj (OTCMKTS:KNYJY) and Graco (NYSE:GGG) are both large-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Profitability

This table compares Kone Oyj and Graco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kone Oyj	8.33%	38.87%	10.68%
Graco	23.53%	19.54%	15.86%

Institutional & Insider Ownership

93.9% of Graco shares are held by institutional investors. 2.2% of Graco shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Kone Oyj and Graco”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kone Oyj	$12.72 billion	2.02	$1.11 billion	$1.06	26.75
Graco	$2.24 billion	5.63	$521.84 million	$3.18	24.44

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

Volatility and Risk

Kone Oyj has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Graco has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Kone Oyj and Graco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kone Oyj	2	4	1	1	2.12
Graco	0	5	2	0	2.29

Graco has a consensus price target of $95.00, indicating a potential upside of 22.26%. Given Graco’s stronger consensus rating and higher possible upside, analysts plainly believe Graco is more favorable than Kone Oyj.

Dividends

Kone Oyj pays an annual dividend of $0.45 per share and has a dividend yield of 1.6%. Graco pays an annual dividend of $1.18 per share and has a dividend yield of 1.5%. Kone Oyj pays out 42.5% 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. Graco has increased its dividend for 29 consecutive years.

Summary

Graco beats Kone Oyj on 12 of the 18 factors compared between the two stocks.

About Kone Oyj

KONE Oyj, together with its subsidiaries, engages in the elevator and escalator business worldwide. The company provides elevators, escalators, and automatic building doors. It offers maintenance services; and modernization solutions. In addition, the company offers KONE Office Flow, a connected solution that allows for personalized user experiences and touch-free access; health and well-being solutions for elevators, escalators, and doors; KONE Access, an access control system, which is integrated with elevator system and building doors; KONE Destination, a destination control system that reduce waiting and travel times; KONE infotainment, a communication channel for building tenants and visitors; and monitoring solutions that enable real-time inspection of elevators and escalators. Further, it provides people flow planning and consulting services; solutions for special buildings and large projects; cybersecurity solutions; and energy solutions for greener buildings. KONE Oyj was founded in 1908 and is based in Espoo, Finland.

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.