NYSE:GHM

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Flawless balance sheet with moderate growth potential.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-5.9%

GHM

-1.9%

US Machinery

1.3%

US Market


1 Year Return

-38.4%

GHM

-7.4%

US Machinery

6.1%

US Market

Return vs Industry: GHM underperformed the US Machinery industry which returned -5.8% over the past year.

Return vs Market: GHM underperformed the US Market which returned 6.7% over the past year.


Shareholder returns

GHMIndustryMarket
7 Day-5.9%-1.9%1.3%
30 Day-11.2%-9.1%-0.3%
90 Day-10.6%7.8%16.6%
1 Year-36.8%-38.4%-5.5%-7.4%8.4%6.1%
3 Year-36.0%-39.8%7.9%0.9%35.8%26.9%
5 Year-30.8%-37.2%44.2%27.0%62.7%44.7%

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?

63.57x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: GHM ($12.05) is trading above our estimate of fair value ($4.57)

Significantly Below Fair Value: GHM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: GHM is poor value based on its PE Ratio (63.6x) compared to the Machinery industry average (18.9x).

PE vs Market: GHM is poor value based on its PE Ratio (63.6x) compared to the US market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: GHM is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: GHM is good value based on its PB Ratio (1.2x) compared to the US Machinery industry average (1.9x).


Next Steps

Future Growth

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

32.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GHM's forecast earnings growth (32% per year) is above the savings rate (2.2%).

Earnings vs Market: GHM's earnings (32% per year) are forecast to grow faster than the US market (22.8% per year).

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

Revenue vs Market: GHM's revenue is expected to decline over the next 3 years (-2.6% per year).

High Growth Revenue: GHM's revenue is forecast to decline over the next 3 years (-2.6% 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 (2.3%).


Next Steps

Past Performance

How has Graham performed over the past 5 years?

-53.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GHM has high quality earnings.

Growing Profit Margin: GHM became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: GHM's earnings have declined by -53.2% per year over the past 5 years.

Accelerating Growth: GHM has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: GHM has become profitable in the last year, making it difficult to compare its past year earnings growth to the Machinery industry (-5.4%).


Return on Equity

High ROE: GHM's Return on Equity (1.9%) is considered low.


Next Steps

Financial Health

How is Graham's financial position?


Financial Position Analysis

Short Term Liabilities: GHM's short term assets ($126.7M) exceed its short term liabilities ($49.2M).

Long Term Liabilities: GHM's short term assets ($126.7M) exceed its long term liabilities ($2.2M).


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


Next Steps

Dividend

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

3.65%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: GHM's dividend (3.65%) is higher than the bottom 25% of dividend payers in the US market (1.68%).

High Dividend: GHM's dividend (3.65%) is low compared to the top 25% of dividend payers in the US market (4.58%).


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 (226.9%), GHM's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GHM's dividends in 3 years are not forecast to be well covered by earnings (129.4% payout ratio).


Next Steps

Management

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

12.0yrs

Average management tenure


CEO

Jim Lines (59yo)

12.5yrs

Tenure

US$1,612,434

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD1.61M) is above average for companies of similar size in the US market ($USD610.56K).

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


Leadership Team

NamePositionTenureCompensationOwnership
James Lines
President12.5yrsUS$1.61m1.68% $2.0m
Jeffrey Glajch
VP of Finance & Administration11.33yrsUS$499.19k0.73% $879.3k
Jennifer Condame
Chief Accounting Officer & Controller12yrsUS$385.61k0.29% $346.3k

12.0yrs

Average Tenure

57yo

Average Age

Experienced Management: GHM's management team is seasoned and experienced (12 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
James Lines
President12.5yrsUS$1.61m1.68% $2.0m
Jerald Bidlack
Director Emeritus5.17yrsUS$107.06kno data
Jonathan Painter
Independent Director6.5yrsUS$101.98k0.11% $137.4k
James Malvaso
Independent Chairman of the Board5.25yrsUS$127.48k0.26% $314.7k
Gerard Mazurkiewicz
Independent Director12.92yrsUS$116.98k0.18% $214.8k
James Barber
Independent Director9.5yrsUS$101.98k0.24% $283.6k
Lisa Schnorr
Independent Director6.5yrsUS$111.98k0.12% $147.2k
Alan Fortier
Independent Director12yrsUS$108.98k0.28% $335.0k

8.0yrs

Average Tenure

65yo

Average Age

Experienced Board: GHM's board of directors are considered experienced (8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: GHM insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


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$120.126m
  • Shares outstanding: 9.97m
  • Website: https://www.graham-mfg.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GHMNYSE (New York Stock Exchange)YesCommon StockUSUSDJul 1978

Biography

Graham Corporation, together with its subsidiaries, designs, manufactures, and supplies vacuum and heat transfer equipment for the chemical, defense, petrochemical, petroleum refining, electric power generation, and other industries. It offers heat transfer equipment, including surface condensers, heliflows, water heaters, and various types of heat exchangers, as well as custom-engineered ejectors; and vacuum equipment, such as steam jet ejector vacuum systems and liquid ring vacuum pumps. The company also services and sells spare parts for its equipment. It sells its products directly, as well as through independent sales representatives in the United States, the Middle East, Canada, Asia, South America, and internationally. Graham Corporation was founded in 1936 and is headquartered in Batavia, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/10 00:01
End of Day Share Price2020/07/09 00:00
Earnings2020/03/31
Annual Earnings2020/03/31


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.