Mitsubishi Heavy Industries (OTCMKTS:MHVYF) & Graco (NYSE:GGG) Critical Contrast

Mitsubishi Heavy Industries (OTCMKTS:MHVYF) 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, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.

Risk and Volatility

Mitsubishi Heavy Industries has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Graco has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Mitsubishi Heavy Industries and Graco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Heavy Industries	1	1	0	1	2.33
Graco	0	3	4	0	2.57

Graco has a consensus price target of $96.50, suggesting a potential upside of 2.00%. Given Graco’s stronger consensus rating and higher probable upside, analysts plainly believe Graco is more favorable than Mitsubishi Heavy Industries.

Profitability

This table compares Mitsubishi Heavy Industries and Graco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mitsubishi Heavy Industries	5.21%	11.07%	4.11%
Graco	23.33%	19.49%	15.89%

Institutional & Insider Ownership

93.9% of Graco shares are held by institutional investors. 2.2% of Graco 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.

Earnings & Valuation

This table compares Mitsubishi Heavy Industries and Graco”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mitsubishi Heavy Industries	$33.01 billion	3.40	$1.62 billion	$0.56	59.46
Graco	$2.24 billion	7.01	$521.84 million	$3.09	30.62

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

Summary

Graco beats Mitsubishi Heavy Industries on 11 of the 15 factors compared between the two stocks.

About Mitsubishi Heavy Industries

Mitsubishi Heavy Industries, Ltd. manufactures and sells heavy machinery worldwide. It operates through Energy Systems; Plants & Infrastructure Systems; Logistics, Thermal & Drive Systems; and Aircraft, Defense & Space segments. The company offers thermal, renewable energy, nuclear power generation, and engine power plants; oil and gas production plants; lithium-ion battery products and fuel cells; civil aircrafts and engines, aviation equipment, and maintenance, repair, and overhaul of aircrafts; and launch vehicles and services, rocket engines, reaction control systems, space stations, rocket launchers, rocket engine combustion test facilities, and electronic parts. It also provides passenger and commercial ships, LNG and LPG carriers, special purpose vessels, and IT services and systems; marine machineries, boilers, turbines, engines, and structures; and intelligent transport systems products and solutions, such as electronic toll collection system, road user charging system, highway traffic management system, EV management system, and development system. In addition, the company offers organic solvent exhaust gas treatment system, waste-to-energy system, sludge treatment system, air quality control system, and bio-treatment system; turbochargers, car air-conditioning and refrigeration systems, rubber and tire machinery, and testing equipment; forklift trucks; and printing, paper converting, and metals, and food & packaging machinery, pumps, compressors & mechanical turbines, hydraulic components. Further, it provides gas holders, vibration control systems, water pipes, tunnel excavation machinery, and cybersecurity solutions for industrial control systems; special vehicles, naval ship and maritime systems, defense aircrafts, helicopters, defense aeroengines, and guided weapon systems; CO2 capture plants; and after-sales services. The company was founded in 1884 and is headquartered in Tokyo, Japan.

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.