Griffon (NYSE:GFF) and CSW Industrials (NYSE:CSW) Critical Comparison

CSW Industrials (NYSE:CSW) and Griffon (NYSE:GFF) are both mid-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CSW Industrials and Griffon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CSW Industrials	0	6	1	2	2.56
Griffon	0	1	1	2	3.25

CSW Industrials presently has a consensus price target of $347.57, suggesting a potential upside of 15.97%. Griffon has a consensus price target of $122.50, suggesting a potential upside of 27.45%. Given Griffon’s stronger consensus rating and higher possible upside, analysts plainly believe Griffon is more favorable than CSW Industrials.

Valuation & Earnings

This table compares CSW Industrials and Griffon”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CSW Industrials	$1.08 billion	4.51	$112.04 million	$7.29	41.11
Griffon	$2.56 billion	1.70	$51.11 million	$3.92	24.52

CSW Industrials has higher earnings, but lower revenue than Griffon. Griffon is trading at a lower price-to-earnings ratio than CSW Industrials, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares CSW Industrials and Griffon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CSW Industrials	10.34%	17.41%	8.90%
Griffon	8.08%	249.31%	12.64%

Insider & Institutional Ownership

82.8% of CSW Industrials shares are held by institutional investors. Comparatively, 73.2% of Griffon shares are held by institutional investors. 1.2% of CSW Industrials shares are held by insiders. Comparatively, 10.2% of Griffon shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

CSW Industrials pays an annual dividend of $1.20 per share and has a dividend yield of 0.4%. Griffon pays an annual dividend of $0.88 per share and has a dividend yield of 0.9%. CSW Industrials pays out 16.5% of its earnings in the form of a dividend. Griffon pays out 22.4% 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. CSW Industrials has increased its dividend for 6 consecutive years and Griffon has increased its dividend for 1 consecutive years.

Risk & Volatility

CSW Industrials has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Griffon has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500.

About CSW Industrials

CSW Industrials, Inc. operates as a diversified industrial company in the United States and internationally. It operates through three segments: Contractor Solutions, Engineered Building Solutions, and Specialized Reliability Solutions. The Contractor Solutions segment provides condensate pads, pans, pumps, switches, and traps; cements, diffusers, grilles, registers, solvents, thread sealants, and vents; line set covers; refrigerant caps; wire pulling head tools; electrical protection, chemical maintenance, and installation supplies for HVAC; ductless mini-split systems installation support tools and accessories; and drain waste and vent system products for use in HVAC/R, plumbing, general industrial, architecturally specified building products. The Engineered Building Solutions segment offers architectural railings and associated services; fire and smoke protection solutions; and pre-engineered and custom architectural building components for use in architecturally specified building products. The Specialized Reliability Solutions segment provides compounds, lubricants, lubricant management products, and sealants; desiccant breather filtration products; and contamination control, industrial maintenance and repair, rail friction modifiers, sealants, and operations solutions for use in energy, general industrial, mining, and rail transportation. The company was incorporated in 2014 and is headquartered in Dallas, Texas.

About Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.