GHM vs ESAB

For growth investors, Graham Corporation (GHM) is the stronger pick with 13.

1% revenue growth year-over-year, versus 3. 7% for ESAB Corporation (ESAB). ESAB Corporation (ESAB) offers the better valuation at 27. 5x trailing P/E (17. 5x forward), making it the more compelling value choice. Analysts rate ESAB Corporation (ESAB) a "Buy" — based on 10 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, ESAB Corporation (ESAB) is the cheapest at 27.

5x versus Graham Corporation at 87. 5x. On forward P/E, ESAB Corporation is actually cheaper at 17. 5x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Graham Corporation wins at 1. 90x versus ESAB Corporation's 2. 41x — a reasonable growth-adjusted valuation.

Over the past 5 years, Graham Corporation (GHM) delivered a total return of +572.

3%, compared to +107. 2% for ESAB Corporation (ESAB). Over 10 years, the gap is even starker: GHM returned +445. 3% versus ESAB's +104. 2%. 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), ESAB Corporation (ESAB) is the lower-risk stock at 1.

24β versus Graham Corporation's 2. 21β — meaning GHM is approximately 79% more volatile than ESAB relative to the S&P 500. On balance sheet safety, Graham Corporation (GHM) carries a lower debt/equity ratio of 6% versus 65% for ESAB Corporation — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Graham Corporation (GHM) is pulling ahead at 13.

1% versus 3. 7% for ESAB Corporation (ESAB). On earnings-per-share growth, the picture is similar: Graham Corporation grew EPS 164. 3% year-over-year, compared to -13. 7% for ESAB Corporation. Over a 3-year CAGR, GHM leads at 19. 6% 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.

ESAB Corporation (ESAB) is the more profitable company, earning 8.

0% net margin versus 5. 8% for Graham Corporation — meaning it keeps 8. 0% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: ESAB leads at 17. 3% versus 7. 2% for GHM. At the gross margin level — before operating expenses — ESAB leads at 35. 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, Graham Corporation (GHM) is the more undervalued stock at a PEG of 1. 90x versus ESAB Corporation's 2. 41x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, ESAB Corporation (ESAB) trades at 17. 5x forward P/E versus 80. 6x for Graham Corporation — 63. 1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for ESAB: 37. 7% to $141. 00.

In this comparison, ESAB (0.

4% yield) pays a dividend. GHM does not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, ESAB Corporation (ESAB) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 1.

24), +104. 2% 10Y return). Graham Corporation (GHM) carries a higher beta of 2. 21 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (ESAB: +104. 2%, GHM: +445. 3%), 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.