Financial Comparison: Thermon Group (NYSE:THR) & Transcat (NASDAQ:TRNS)

Thermon Group (NYSE:THR) and Transcat (NASDAQ:TRNS) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Valuation and Earnings

This table compares Thermon Group and Transcat”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thermon Group	$498.21 million	1.87	$53.51 million	$1.57	17.89
Transcat	$278.42 million	2.86	$14.52 million	$1.56	54.71

Thermon Group has higher revenue and earnings than Transcat. Thermon Group is trading at a lower price-to-earnings ratio than Transcat, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Thermon Group and Transcat, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thermon Group	0	0	0	0	0.00
Transcat	0	2	2	0	2.50

Transcat has a consensus price target of $114.00, indicating a potential upside of 33.58%. Given Transcat’s stronger consensus rating and higher possible upside, analysts clearly believe Transcat is more favorable than Thermon Group.

Volatility & Risk

Thermon Group has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Transcat has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Insider and Institutional Ownership

99.8% of Thermon Group shares are held by institutional investors. Comparatively, 98.3% of Transcat shares are held by institutional investors. 2.5% of Thermon Group shares are held by insiders. Comparatively, 2.3% of Transcat shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Thermon Group and Transcat’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Thermon Group	10.74%	13.08%	8.40%
Transcat	5.21%	6.47%	5.02%

Summary

Thermon Group beats Transcat on 9 of the 14 factors compared between the two stocks.

About Thermon Group

Thermon Group Holdings, Inc. provides engineered industrial process heating solutions for process industries in the United States and Latin America, Canada, Europe, the Middle East, Africa, and the Asia-Pacific. It offers heat tracing products, such as electric heat tracing cables, steam heating solutions, controls, monitoring and software, instrumentation, project services, industrial heating and filtration solutions, temporary electrical power distribution and lighting, and other products and services. The company also provides controls, monitoring, and software systems for the control and management of a heat trace system; environmental heating solutions under the Ruffneck, Norsemen, and Catadyne brands; process heating solutions under the Caloritech brand name; filtration solutions under the 3L Filters brand; rail and transit solutions under the Hellfire, Velocity, ArcticSense, and other brand names; and boilers under the Vapor Power, Precision Boilers, and Caloritech brands. In addition, it offers project services; transportation heating products, including track and switch heaters, accessories, control panels, rail heaters, gas blower accessories, and air curtains; transit heaters; and velocity heat products. Further, the company offers temporary power solutions; heating systems, such as engineered electric heat, explosion proof gas catalytic heaters, heaters for harshest environments, methane abatement, and engineered filtration system; electrically, steam, and fluid heated tubing bundles; and pre-insulated tubing and system accessories tubing bundles. It serves chemical and petrochemical, oil and gas, power generation, rail and transit, commercial, energy transition/decarbonization, mining and mineral processing, maritime/shipbuilding, semiconductors, pharmaceutical and biotechnology, food and beverage, data centers, and renewables industries through a network of sales and service professionals, and distributors. Thermon Group Holdings, Inc. was founded in 1954 and is headquartered in Austin, Texas.

About Transcat

Transcat, Inc. provides calibration and laboratory instrument services in the United States, Canada, and internationally. It operates through two segments: Service and Distribution. The Service segment offers calibration, repair, inspection, analytical qualification, preventative maintenance, consulting, and other related services. This segment also provides CalTrak, a proprietary document and asset management system that is used to manage the workflow of its calibration service centers and customers’ assets; and Compliance, Control and Cost, an online customer portal that provides its customers with web-based asset management capability, as well as a safe and secure off-site archive of calibration and other service records. The Distribution segment sells and rents test, measurement, and control instruments for customers’ test and measurement instrumentation needs, as well as value added services, such as calibration/certification of equipment purchase, equipment rental, used equipment for sale, and equipment kitting. This segment markets and sells its products through website, digital and print advertising, proactive outbound sales, and an inbound call center. The company provides services and products to highly regulated industries, principally life science, which includes companies in the pharmaceutical, biotechnology, medical device, and other FDA-regulated industries; and additional industries, including aerospace and defense industrial manufacturing, energy and utilities, and other industries that require accuracy in processes and confirmation of the capabilities of their equipment. Transcat, Inc. was incorporated in 1964 and is headquartered in Rochester, New York.