Gorman-Rupp (NYSE:GRC) versus Hydrofarm Holdings Group (NASDAQ:HYFM) Critical Analysis

Gorman-Rupp (NYSE:GRC) and Hydrofarm Holdings Group (NASDAQ:HYFM) are both small-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Risk & Volatility

Gorman-Rupp has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Hydrofarm Holdings Group has a beta of 2.53, meaning that its share price is 153% more volatile than the S&P 500.

Insider and Institutional Ownership

59.3% of Gorman-Rupp shares are held by institutional investors. Comparatively, 26.6% of Hydrofarm Holdings Group shares are held by institutional investors. 11.6% of Gorman-Rupp shares are held by company insiders. Comparatively, 14.9% of Hydrofarm Holdings Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Gorman-Rupp and Hydrofarm Holdings Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gorman-Rupp	$722.48 million	2.48	$53.02 million	$2.80	24.27
Hydrofarm Holdings Group	$106.21 million	0.03	-$289.79 million	($60.70)	-0.01

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Gorman-Rupp and Hydrofarm Holdings Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gorman-Rupp	0	2	1	0	2.33
Hydrofarm Holdings Group	1	0	0	0	1.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gorman-Rupp	10.20%	17.13%	8.61%
Hydrofarm Holdings Group	-267.20%	-500.33%	-159.25%

Summary

Gorman-Rupp beats Hydrofarm Holdings Group on 11 of the 13 factors compared between the two stocks.

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.

About Hydrofarm Holdings Group

Hydrofarm Holdings Group, Inc., together with its subsidiaries, manufactures and distributes controlled environment agriculture (CEA) equipment and supplies in the United States and Canada. The company provides agricultural lighting devices, indoor climate control equipment, and nutrients, as well as plant additives used to grow, farm, and cultivate cannabis, flowers, fruits, plants, vegetables, grains, and herbs in controlled environment. It is also involved in the distribution of CEA equipment and supplies comprising nutrients and fertilizers; grow light systems; horticulture benches and racking systems; heating, ventilation, and air conditioning systems; humidity and carbon dioxide monitors and controllers; water pumps, heaters, chillers, and filters; and various growing media typically made from soil, peat, rock wool or coconut fiber, and others. The company offers its products to specialty hydroponic retailers, commercial resellers and greenhouse builders, garden centers, hardware stores, and e-commerce retailers under the Active Air, Active Aqua, Aurora Peat Products, HEAVY 16, House & Garden, Gaia Green, Grotek, Innovative Growers Equipment, Mad Farmer, Phantom, PHOTOBIO, Procision, Roots Organics, Soul, and SunBlaster brands. It serves its products through a range of commercial and home gardening equipment and supplies retailers. Hydrofarm Holdings Group, Inc. was founded in 1977 and is based in Shoemakersville, Pennsylvania.