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Babcock (BW) vs Graham Corporation (GHM)

Babcock and Graham Corporation are both Specialty Industrial Machinery companies. Graham Corporation is the larger, with a market value of $846.2M against $461.8M — 1.8× the size. Babcock has negative trailing earnings, so its P/E is not meaningful; Graham Corporation trades at 61.0×. Babcock grew revenue faster over the last twelve months: 50.9% against 16.2%. Graham Corporation has the higher net margin (5.05% vs −3.98%) and the lower return on invested capital (7.77% vs 134.7%). Across the 21 metrics below, Babcock leads on 11 and Graham Corporation on 10.

Valuation

Metric BW GHM Specialty Industrial Machinery median
P/E n/m 61.01 25.64
P/S 0.53 3.19 2.81
P/B 7.73 4.26 2.99
Price to free cash flow 2.80 28.94 23.82
EV/EBITDA 10.01 32.28 15.15
EV/Sales 0.48 2.93 2.77
Earnings yield (5.79%) 1.64% 3.07%
Free cash flow yield 35.72% 3.46% 3.67%

Profitability

Metric BW GHM Specialty Industrial Machinery median
Gross margin 19.74% 24.99% 35.46%
Operating margin 3.08% 5.95% 10.04%
Net margin (3.98%) 5.05% 7.24%
Free cash flow margin 18.95% 11.02% 9.04%
Return on equity 26.41% 8.20% 10.73%
Return on assets (3.90%) 3.96% 4.51%
Return on invested capital 134.68% 7.77% 5.00%

Growth

Metric BW GHM Specialty Industrial Machinery median
Revenue growth (TTM) 50.93% 16.23% 6.59%
EPS growth (last fiscal year) 41.46% 0.90% 5.97%
Revenue growth, 5-year CAGR 0.74% 20.27% 8.53%
Net income growth, 5-year CAGR 0.00% 39.41% 6.58%

Health

Metric BW GHM Specialty Industrial Machinery median
Debt to equity 5.28 0.00 0.33
Current ratio 1.45 1.24 2.08
Net debt to EBITDA 2.60 0.27 1.32

Dividend

Metric BW GHM Specialty Industrial Machinery median
Dividend yield — — 1.11%
Payout ratio — — 0.31

Size

Metric BW GHM Specialty Industrial Machinery median
Market cap 461.79m 846.24m 2.19b

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