Company Overview
The Gorman-Rupp Company, operating under the ticker symbol GRC, functions as a manufacturer within the Industrials sector, specifically focusing on the Specialty Industrial Machinery industry. The organization designs, manufactures, and sells a comprehensive range of pumps and pump systems, including self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, and high-pressure boost units. These products are distributed both within the United States and internationally to serve various industrial applications. As of the latest available data, the company holds a market capitalization of $1.62 billion and reported trailing twelve-month revenue of $682.39 million. The enterprise employs a workforce of 1,415 individuals to support its global manufacturing and sales operations. The market capitalization of $1.62 billion indicates that the company is established as a mid-cap entity with significant operational scale, while the annual revenue of $682.39 million reflects a substantial volume of sales in the specialty machinery market. The employee count of 1,415 suggests a relatively large internal organization capable of managing complex engineering and logistical requirements for pump systems. These valuation and revenue figures collectively position the company as a significant player in its niche, balancing the financial weight of a multi-billion dollar market cap with the operational reality of a specialized industrial manufacturer.
Financial Health
The company reported trailing twelve-month revenue of $682.39 million, generating net income of $53.02 million and EBITDA of $123.98 million during the reporting period. The substantial gap between the total revenue of $682.39 million and the net income of $53.02 million reveals a cost structure where approximately 92.2% of revenue is consumed by operating expenses, taxes, and interest before arriving at the final profit. Free cash flow stands at $64.03 million, which provides the company with financial flexibility to fund capital expenditures, reduce debt, or return capital to shareholders without relying solely on external financing. The company maintains a cash balance of $35.08 million against a total debt load of $328.81 million, resulting in a debt-to-equity ratio of 79.28 that indicates a leveraged balance sheet relative to its equity base. Despite the leverage, the current ratio of 2.37 demonstrates strong short-term liquidity, suggesting the firm possesses more than double the current assets necessary to cover its current liabilities. Return on Equity is calculated at 13.4%, while Return on Assets stands at 7.0%, metrics that reveal management's effectiveness in generating profits from shareholder equity and utilizing its total asset base. The difference between the high ROE and lower ROA is typical for leveraged companies where equity acts as a smaller base for returns compared to the total assets funded by a mix of debt and equity.
Valuation Assessment
Valuation multiples for the stock show a trailing P/E ratio of 30.41 compared to a forward P/E of 23.71. The difference between these two figures implies that the market expects earnings growth to be higher than the current run-rate, as the forward multiple is lower than the trailing multiple despite the company's recent growth. The price-to-book ratio is 3.88, indicating that the market is pricing the company at a significant premium over its net book value, reflecting intangible assets, brand strength, or growth expectations beyond the tangible asset base. Alternative valuation metrics include a price-to-sales ratio of 2.37 and an EV/EBITDA of 15.40, which suggest the company is valued moderately high relative to its sales and earnings before interest, taxes, depreciation, and amortization. The stock has traded between a 52-week high of $68.02 and a 52-week low of $30.87, establishing a wide trading range that captures significant volatility. The beta value of 1.28 indicates that the stock's price volatility is 28% higher than the broader market, meaning the stock tends to move more aggressively than the S&P 500 in response to market conditions.
Growth & Income
Recent performance metrics indicate a revenue growth rate of 2.4% year-over-year and an earnings growth rate of 23.8% year-over-year. The earnings growth rate of 23.8% is significantly faster than the revenue growth rate of 2.4%, implying that the company has improved its profitability through cost efficiencies, margin expansion, or favorable pricing power rather than solely through volume increases. The company pays a dividend with a yield of 1.2% and maintains a payout ratio of 36.9%, which suggests a sustainable distribution policy given that the payout is less than half of the generated earnings. With a payout ratio of 36.9%, the company retains a majority of its earnings for reinvestment, supporting the higher earnings growth observed despite modest revenue expansion. The overall growth and income profile presents a mix of moderate revenue stability and strong earnings acceleration, supported by a conservative yet leveraged dividend strategy that offers income to investors while prioritizing internal capital generation.