GGG vs XYL

For growth investors, Graco Inc.

(GGG) is the stronger pick with 5. 8% revenue growth year-over-year, versus 5. 5% for Xylem Inc. (XYL). Graco Inc. (GGG) offers the better valuation at 26. 1x trailing P/E (25. 7x forward), making it the more compelling value choice. Analysts rate Graco Inc. (GGG) a "Hold" — based on 20 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Graco Inc.

(GGG) is the cheapest at 26. 1x versus Xylem Inc. at 30. 3x. On forward P/E, Xylem Inc. is actually cheaper at 21. 4x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Xylem Inc. wins at 0. 94x versus Graco Inc. 's 2. 59x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Graco Inc.

(GGG) delivered a total return of +8. 4%, compared to +5. 6% for Xylem Inc. (XYL). Over 10 years, the gap is even starker: GGG returned +233. 7% versus XYL's +209. 7%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Graco Inc.

(GGG) is the lower-risk stock at 0. 80β versus Xylem Inc. 's 0. 92β — meaning XYL is approximately 15% more volatile than GGG relative to the S&P 500. On balance sheet safety, Graco Inc. (GGG) carries a lower debt/equity ratio of 2% versus 17% for Xylem Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Graco Inc.

(GGG) is pulling ahead at 5. 8% versus 5. 5% for Xylem Inc. (XYL). On earnings-per-share growth, the picture is similar: Graco Inc. grew EPS 9. 2% year-over-year, compared to 7. 4% for Xylem Inc.. Over a 3-year CAGR, XYL leads at 17. 8% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Graco Inc.

(GGG) is the more profitable company, earning 23. 3% net margin versus 10. 6% for Xylem Inc. — meaning it keeps 23. 3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: GGG leads at 27. 3% versus 13. 5% for XYL. At the gross margin level — before operating expenses — GGG leads at 52. 5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Xylem Inc. (XYL) is the more undervalued stock at a PEG of 0. 94x versus Graco Inc. 's 2. 59x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Xylem Inc. (XYL) trades at 21. 4x forward P/E versus 25. 7x for Graco Inc. — 4. 2x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for XYL: 27. 8% to $151. 57.

All stocks in this comparison pay dividends.

Xylem Inc. (XYL) offers the highest yield at 1. 4%, versus 1. 3% for Graco Inc. (GGG).

For long-horizon retirement investors, Graco Inc.

(GGG) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 80), 1. 3% yield, +233. 7% 10Y return). Both have compounded well over 10 years (GGG: +233. 7%, XYL: +209. 7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Industrials sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.