NYSE:GHM

Stock Analysis Report

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Market Cap

US$144.6m

Last Updated

2021/08/01 22:14 UTC

Data Sources

Company Financials +

Executive Summary

Graham Corporation, together with its subsidiaries, designs, manufactures, and supplies vacuum and heat transfer equipment for the chemical, defense, petrochemical, petroleum refining, power generation/alternative energy, and other industries. More Details


Snowflake Analysis

Flawless balance sheet with high growth potential and pays a dividend.


Similar Companies

Share Price & News

How has Graham's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GHM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: GHM's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-1.3%

GHM

0.9%

US Machinery

-0.4%

US Market


1 Year Return

4.0%

GHM

49.8%

US Machinery

35.9%

US Market

Return vs Industry: GHM underperformed the US Machinery industry which returned 49.8% over the past year.

Return vs Market: GHM underperformed the US Market which returned 35.9% over the past year.


Shareholder returns

GHMIndustryMarket
7 Day-1.3%0.9%-0.4%
30 Day0.2%-0.05%-0.3%
90 Day-3.3%-1.7%3.1%
1 Year7.3%4.0%53.0%49.8%38.0%35.9%
3 Year-42.6%-46.7%61.3%51.8%62.9%52.7%
5 Year-15.1%-23.9%137.0%112.2%121.3%96.9%

Long-Term Price Volatility Vs. Market

How volatile is Graham's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Graham undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GHM ($13.69) is trading below our estimate of fair value ($33.88)

Significantly Below Fair Value: GHM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GHM is poor value based on its PE Ratio (57.4x) compared to the US Machinery industry average (31.2x).

PE vs Market: GHM is poor value based on its PE Ratio (57.4x) compared to the US market (18.1x).


Price to Earnings Growth Ratio

PEG Ratio: GHM is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: GHM is good value based on its PB Ratio (1.4x) compared to the US Machinery industry average (2.8x).


Future Growth

How is Graham forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

55.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GHM's forecast earnings growth (55.1% per year) is above the savings rate (2%).

Earnings vs Market: GHM's earnings (55.1% per year) are forecast to grow faster than the US market (15% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: GHM's revenue (22.6% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: GHM's revenue (22.6% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GHM's Return on Equity is forecast to be low in 3 years time (7%).


Past Performance

How has Graham performed over the past 5 years?

-16.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GHM has a high level of non-cash earnings.

Growing Profit Margin: GHM's current net profit margins (2.4%) are higher than last year (2.1%).


Past Earnings Growth Analysis

Earnings Trend: GHM's earnings have declined by 16.3% per year over the past 5 years.

Accelerating Growth: GHM's earnings growth over the past year (26.8%) exceeds its 5-year average (-16.3% per year).

Earnings vs Industry: GHM earnings growth over the past year (26.8%) exceeded the Machinery industry 6.3%.


Return on Equity

High ROE: GHM's Return on Equity (2.4%) is considered low.


Financial Health

How is Graham's financial position?


Financial Position Analysis

Short Term Liabilities: GHM's short term assets ($120.2M) exceed its short term liabilities ($43.6M).

Long Term Liabilities: GHM's short term assets ($120.2M) exceed its long term liabilities ($2.8M).


Debt to Equity History and Analysis

Debt Level: GHM is debt free.

Reducing Debt: GHM has not had any debt for past 5 years.

Debt Coverage: GHM has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: GHM has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Graham current dividend yield, its reliability and sustainability?

3.21%

Current Dividend Yield


Upcoming Dividend Payment

TodayAug 02 2021Ex Dividend DateAug 10 2021Dividend Pay DateAug 25 202115 days from Ex DividendBuy in the next 7 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: GHM's dividend (3.21%) is higher than the bottom 25% of dividend payers in the US market (1.31%).

High Dividend: GHM's dividend (3.21%) is low compared to the top 25% of dividend payers in the US market (3.55%).


Stability and Growth of Payments

Stable Dividend: GHM's dividends per share have been stable in the past 10 years.

Growing Dividend: GHM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (184.6%), GHM's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GHM's dividends in 3 years are forecast to be covered by earnings (66.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

12.3yrs

Average management tenure


CEO

Jim Lines (60 yo)

13.5yrs

Tenure

US$1,893,309

Compensation

Mr. James R. Lines, also known as Jim, has been the Chief Executive Officer of Graham Corporation since January 25, 2008 and Executive Director since July 27, 2006 and served as its President since June 14...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD1.89M) is above average for companies of similar size in the US market ($USD551.21K).

Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: GHM's management team is seasoned and experienced (12.3 years average tenure).


Board Members

Experienced Board: GHM's board of directors are considered experienced (9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.9%.


Top Shareholders

Company Information

Graham Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Graham Corporation
  • Ticker: GHM
  • Exchange: NYSE
  • Founded: 1936
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$144.567m
  • Shares outstanding: 10.56m
  • Website: https://www.graham-mfg.com

Number of Employees


Location

  • Graham Corporation
  • 20 Florence Avenue
  • Batavia
  • New York
  • 14020
  • United States

Listings


Biography

Graham Corporation, together with its subsidiaries, designs, manufactures, and supplies vacuum and heat transfer equipment for the chemical, defense, petrochemical, petroleum refining, power generation/alt...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/01 22:14
End of Day Share Price2021/07/30 00:00
Earnings2021/03/31
Annual Earnings2021/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.