Critical Comparison: NN (NASDAQ:NNBR) vs. GrafTech International (NYSE:EAF)

GrafTech International (NYSE:EAF) and NN (NASDAQ:NNBR) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Analyst Ratings

This is a summary of current recommendations for GrafTech International and NN, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrafTech International	1	5	0	0	1.83
NN	1	1	0	1	2.33

GrafTech International currently has a consensus target price of $14.25, suggesting a potential downside of 12.20%. NN has a consensus target price of $4.00, suggesting a potential upside of 194.12%. Given NN’s stronger consensus rating and higher possible upside, analysts clearly believe NN is more favorable than GrafTech International.

Institutional & Insider Ownership

92.8% of GrafTech International shares are owned by institutional investors. Comparatively, 53.9% of NN shares are owned by institutional investors. 1.0% of GrafTech International shares are owned by insiders. Comparatively, 7.9% of NN shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares GrafTech International and NN”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrafTech International	$538.78 million	0.78	-$131.16 million	($7.90)	-2.05
NN	$464.29 million	0.15	-$38.27 million	($1.23)	-1.11

NN has lower revenue, but higher earnings than GrafTech International. GrafTech International is trading at a lower price-to-earnings ratio than NN, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

GrafTech International has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500. Comparatively, NN has a beta of 2.31, suggesting that its share price is 131% more volatile than the S&P 500.

Profitability

This table compares GrafTech International and NN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GrafTech International	-39.13%	N/A	-11.72%
NN	-10.01%	-2.09%	-0.29%

Summary

NN beats GrafTech International on 10 of the 14 factors compared between the two stocks.

About GrafTech International

GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide. The company offers graphite electrodes to produce electric arc furnace steel and other ferrous and non-ferrous metals; and petroleum needle coke, a crystalline form of carbon used in the production of graphite electrodes and synthetic graphite. It sells its products primarily through direct sales force, independent sales representatives, and distributors. GrafTech International Ltd. was founded in 1886 and is headquartered in Brooklyn Heights, Ohio.

About NN

NN, Inc., together with its subsidiaries, designs, manufactures, and sells high-precision components and assemblies for various end markets in the United States and internationally. It operates through two segments, Mobile Solutions and Power Solutions. The Mobile Solutions segment manufactures and sells system critical components for automotive, general industrial, and medical end markets for use in power steering, braking, transmissions, gasoline fuel system, diesel injection, and diesel emissions treatment applications, as well as in heating, ventilation, and air conditioning. The Power Solutions segment designs, manufactures, and sells a range of high-precision metal and plastic components, assemblies, and finished devices used in various applications, such as power control and transportation electrification. Its products include electrical contacts, connectors, contact assemblies, and precision stampings for the electrical, general industrial, automotive, aerospace and defense, and medical end markets. This segment also produces various tools and instruments for the orthopaedics and medical/surgical end markets. NN, Inc. was founded in 1980 and is headquartered in Charlotte, North Carolina.