Head-To-Head Review: Dover (NYSE:DOV) & Graco (NYSE:GGG)

Dover (NYSE:DOV) and Graco (NYSE:GGG) are both large-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Risk & Volatility

Dover has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Graco has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

84.5% of Dover shares are held by institutional investors. Comparatively, 93.9% of Graco shares are held by institutional investors. 1.1% of Dover shares are held by company insiders. Comparatively, 2.2% of Graco 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.

Earnings and Valuation

This table compares Dover and Graco”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dover	$8.09 billion	3.16	$1.09 billion	$8.30	22.87
Graco	$2.24 billion	5.63	$521.84 million	$3.18	24.47

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

Dividends

Dover pays an annual dividend of $2.10 per share and has a dividend yield of 1.1%. Graco pays an annual dividend of $1.18 per share and has a dividend yield of 1.5%. Dover pays out 25.3% 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. Dover has raised its dividend for 70 consecutive years and Graco has raised its dividend for 29 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Dover and Graco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dover	0	5	10	0	2.67
Graco	0	5	2	0	2.29

Dover presently has a consensus price target of $238.21, indicating a potential upside of 25.51%. Graco has a consensus price target of $95.00, indicating a potential upside of 22.08%. Given Dover’s stronger consensus rating and higher possible upside, analysts plainly believe Dover is more favorable than Graco.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dover	13.48%	18.32%	10.26%
Graco	23.53%	19.54%	15.86%

Summary

Dover beats Graco on 9 of the 17 factors compared between the two stocks.

About Dover

Dover Corporation provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. The company's Engineered Products segment provides various equipment, component, software, solution, and services that are used in vehicle aftermarket, waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing end-market. This segment offers manual and power clamp, rotary and linear mechanical indexer, conveyor, pick and place unit, glove port, and manipulator, as well as end-of-arm robotic gripper, slide, and end effector; winches, hoists, bearings, drives, and electric monitoring system; and radio frequency and microwave filters and switches, and signal intelligence solutions. Its Clean Energy & Fueling segment offers component, equipment, and software and service solution enabling safe storage and transport of fuel, cryogenic gases, and hazardous fluids, as well as operation of retail fueling and vehicle wash establishment. The company's Imaging & Identification segment provides precision marking and coding, product traceability equipment, brand protection, and digital textile printing equipment and solution, as well as related consumable, software, and service to packaged and consumer goods, pharmaceutical, manufacturing, fashion and apparel, and other end-market. Its Pumps & Process Solutions segment manufactures specialty pump, connector, flow meter, fluid connecting solution, plastics and polymer processing equipment, and engineered components for rotating and reciprocating machines. The company's Climate & Sustainability Technologies segment manufactures refrigeration system, refrigeration display case, commercial glass refrigerator and freezer door, and brazed plate heat exchanger for industrial heating and cooling, and residential climate control applications. The company was incorporated in 1947 and is headquartered in Downers Grove, Illinois.

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.