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Graco Inc. (GGG) vs Watts Water Technologies, Inc. (WTS)

Graco Inc. and Watts Water Technologies, Inc. are both Specialty Industrial Machinery companies. Graco Inc. and Watts Water Technologies, Inc. are of similar size ($11.6B and $10.9B). Graco Inc. trades at the lower P/E: 21.5× against 26.0×. Watts Water Technologies, Inc. grew revenue faster over the last twelve months: 18.7% against 5.39%. Graco Inc. has the higher net margin (22.4% vs 16.0%) and the lower return on invested capital (15.9% vs 18.7%). Both pay a dividend; Graco Inc. yields more (1.73% vs 0.66%). Across the 22 metrics below, Graco Inc. leads on 13 and Watts Water Technologies, Inc. on 9.

Valuation

Metric GGG WTS Specialty Industrial Machinery median
P/E 21.53 26.00 25.64
P/S 4.74 4.16 2.81
P/B 4.44 5.01 2.99
Price to free cash flow 18.26 31.65 23.82
EV/EBITDA 14.99 19.76 15.15
EV/Sales 4.73 4.07 2.77
Earnings yield 4.65% 3.85% 3.07%
Free cash flow yield 5.48% 3.16% 3.67%

Profitability

Metric GGG WTS Specialty Industrial Machinery median
Gross margin 51.96% 50.49% 35.46%
Operating margin 26.82% 21.17% 10.04%
Net margin 22.40% 16.00% 7.24%
Free cash flow margin 25.98% 13.26% 9.04%
Return on equity 20.38% 20.91% 10.73%
Return on assets 15.93% 15.41% 4.51%
Return on invested capital 15.91% 18.74% 5.00%

Growth

Metric GGG WTS Specialty Industrial Machinery median
Revenue growth (TTM) 5.39% 18.68% 6.59%
EPS growth (last fiscal year) 9.22% 17.03% 5.97%
Revenue growth, 5-year CAGR 6.27% 10.08% 8.53%
Net income growth, 5-year CAGR 9.57% 24.42% 6.58%

Health

Metric GGG WTS Specialty Industrial Machinery median
Debt to equity 0.04 0.04 0.33
Current ratio 2.13 2.80 2.08
Net debt to EBITDA (0.85) (0.41) 1.32

Dividend

Metric GGG WTS Specialty Industrial Machinery median
Dividend yield 1.73% 0.66% 1.11%
Payout ratio 0.38 0.17 0.31

Size

Metric GGG WTS Specialty Industrial Machinery median
Market cap 10.90b 11.60b 2.19b

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