Analyzing ESAB (NYSE:ESAB) & Greenbrier Companies (NYSE:GBX)

Greenbrier Companies (NYSE:GBX) and ESAB (NYSE:ESAB) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Profitability

This table compares Greenbrier Companies and ESAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Greenbrier Companies	3.21%	4.85%	1.90%
ESAB	5.05%	14.17%	5.62%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Greenbrier Companies and ESAB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greenbrier Companies	3	2	0	0	1.40
ESAB	0	1	7	0	2.88

Greenbrier Companies currently has a consensus target price of $40.33, indicating a potential downside of 3.69%. ESAB has a consensus target price of $118.14, indicating a potential upside of 35.78%. Given ESAB’s stronger consensus rating and higher possible upside, analysts clearly believe ESAB is more favorable than Greenbrier Companies.

Insider and Institutional Ownership

95.6% of Greenbrier Companies shares are held by institutional investors. Comparatively, 91.1% of ESAB shares are held by institutional investors. 1.7% of Greenbrier Companies shares are held by company insiders. Comparatively, 7.2% of ESAB shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Greenbrier Companies and ESAB”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greenbrier Companies	$2.46 billion	0.53	$79.00 million	$2.48	16.89
ESAB	$2.84 billion	1.90	$226.77 million	$2.47	35.23

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

Dividends

Greenbrier Companies pays an annual dividend of $1.36 per share and has a dividend yield of 3.2%. ESAB pays an annual dividend of $0.48 per share and has a dividend yield of 0.6%. Greenbrier Companies pays out 54.8% of its earnings in the form of a dividend. ESAB pays out 19.4% 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. Greenbrier Companies has increased its dividend for 3 consecutive years and ESAB has increased its dividend for 3 consecutive years.

Volatility & Risk

Greenbrier Companies has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, ESAB has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Summary

ESAB beats Greenbrier Companies on 12 of the 16 factors compared between the two stocks.

About Greenbrier Companies

The Greenbrier Companies, Inc. designs, manufactures and markets freight railcars and related equipment. Its products serve a range of cargo needs, including transporting agricultural goods, energy products, construction materials and other freight. The company also provides railcar leasing and fleet management, as well as maintenance, repair, refurbishment and parts services. Through these activities, Greenbrier supports rail transportation customers across North America and international markets.

About ESAB

ESAB Corporation (NYSE: ESAB) develops and supplies equipment, consumables and digital solutions for welding and cutting. Its products include welding power sources, filler metals, automated welding systems, plasma and gas cutting equipment, and gas control products used in manufacturing, construction, energy and other industrial markets. The company serves customers around the world through a network of manufacturing, sales and distribution operations. Its brands include ESAB and Victor, and its offerings also cover software and services that support welding and cutting workflows.