Up to date on July eighth, 2025 by Felix Martinez
In 2022, The Gorman-Rupp Firm (GRC) introduced that it was growing its quarterly dividend for the fiftieth consecutive 12 months.
Consequently, it grew to become a member of the Dividend Kings. The Dividend Kings are a bunch of simply 55 shares which have raised their dividends for no less than 50 straight years.
This group is amongst our favorites for buyers. That’s as a result of their high-quality enterprise fashions, which have enabled dividend development for many years, are prone to proceed doing so sooner or later.
With this in thoughts, we created a full record of all 55 Dividend Kings.
You may obtain the complete record, together with necessary monetary metrics reminiscent of dividend yields and price-to-earnings ratios, by clicking on the hyperlink under:
This text will study Gorman-Rupp’s enterprise overview, development prospects, aggressive benefits, and anticipated returns for the following 5 years.
Enterprise Overview
Gorman-Rupp has been in enterprise since 1933. The corporate started as a producer of pumps and pumping methods and has advanced into a number one provider of essential methods that industrial shoppers depend on to run their companies.
The corporate generates income exceeding $660 million yearly and has a market capitalization of $996 million.
Regardless of its measurement, Gorman-Rupp is a key cog for a lot of industrial prospects. Its merchandise are utilized in all kinds of finish markets, together with agriculture, air con, development, hearth safety, heating, industrial, liquid dealing with, army, unique tools, petroleum, air flow, water, and wastewater.
Supply: Investor Presentation
The corporate’s water-related companies account for over half of its annual income, non-water-related companies contribute roughly 30%, and restore elements account for the rest.
The Gorman-Rupp Firm reported Q1 2025 web revenue of $12.1 million ($0.46 per share), up 53.8% from $7.9 million ($0.30 per share) in Q1 2024. Web gross sales grew 2.9% to $163.9 million from $159.3 million, pushed by will increase in municipal ($1.8 million), restore ($3.2 million), OEM ($2.5 million), petroleum ($1.0 million), and hearth suppression ($0.7 million) markets, although offset by declines in development ($2.7 million), agriculture ($0.9 million), and industrial ($0.9 million) markets. Adjusted EBITDA rose 5.3% to $29.7 million, with working revenue up 8.3% to $22.1 million and an working margin of 13.5% (up 70 foundation factors), fueled by pricing beneficial properties and SG&A leverage.
Gross revenue elevated 4.0% to $50.3 million, with a gross margin of 30.7% (up 30 foundation factors). SG&A bills had been $25.1 million (15.3% of gross sales), barely up from $24.9 million. Curiosity expense decreased 38.5% to $6.2 million, primarily resulting from refinancing and a $14.6 million discount in debt to $352.2 million. Working money stream doubled to $21.1 million from $10.7 million. Capital expenditures totaled $3.0 million, with a full-year plan of $20.0 million. The order backlog was $217.8 million, down from $234.2 million in Q1 2024 however up from $206.0 million at year-end 2024.
CEO Scott A. King emphasised the robust demand for flood management and stormwater administration from municipalities, driving gross sales and backlog development. The U.S.-based provide chain is anticipated to mitigate the impacts of tariffs via pricing changes. Whereas no particular 2025 steering was supplied, Gorman-Rupp stays optimistic about attaining worthwhile development, supported by a $0.185 per share dividend and share repurchases, which replicate confidence in its monetary and operational power.
Development Prospects
Gorman-Rupp’s position in its business is essential, as the corporate’s merchandise are important for these finish markets to carry out their primary features. This makes this comparatively small firm a significant a part of the commercial sector.
That mentioned, the corporate’s long-term earnings development is usually correlated with the well being of the economic system. Earnings volatility has been a priority, as income can fluctuate considerably from 12 months to 12 months.
The corporate has been very efficient at managing prices, which has enabled steady margins over the past decade; nonetheless, there have been intervals of weak spot.
One issue working in Gorman-Rupp’s favor is the getting older infrastructure that plagues its predominant market of the U.S. The American Society of Civil Engineers charges the nation’s infrastructure as poor.
Total, the getting older infrastructure system receives a C- from the group, with notably poor grades for consuming water, wastewater, and stormwater methods.
It’s estimated that $2.6 trillion might be required to be spent over the following decade to repair and enhance water, wastewater, and flood management methods, assembly the necessity for infrastructure enhancements. This could have Gorman-Rupp well-positioned for years to return.
One other approach Gorman-Rupp makes an attempt to enhance its natural development is thru strategic acquisitions.
A superb instance of this was the beforehand mentioned Fill-Ceremony buy. Utilizing money available and new debt, Gorman-Rupp paid $525 million for Fill-Ceremony, which was previously a division of Tuthill Company.
Fill-Ceremony’s portfolio contains high-performance liquid switch pumps, mechanical and digital meters, precision weights, hoses, nozzles, and a spread of equipment.
The addition of Fill-Ceremony was made doable as a result of Gorman-Rupp’s stability sheet is in remarkably good condition even after issuing new debt to fund the acquisition.
Earlier than this acquisition, the corporate had zero long-term debt on its stability sheet. Debt has elevated, however stays manageable given the numerous affect Fill-Ceremony has already had on outcomes.
Aggressive Benefits and Recession Efficiency
Gorman-Rupp has develop into an business chief, largely, resulting from its capacity to supply quite a lot of merchandise to satisfy the wants of various finish markets. The corporate’s diversified portfolio helps shield in opposition to declines in anyone space of its enterprise.
Fireplace Suppression is probably the most important contributor to gross sales, however this accounts for under round a fifth of the whole income that Gorman-Rupp generates annually.
This diversification may help alleviate declines in a sure space.
Nevertheless, Gorman-Rupp isn’t proof against the impacts of a recession. Listed under are the corporate’s earnings-per-share totals throughout and after the Nice Recession:
2008 earnings-per-share: $1.04 (24% lower)
2009 earnings-per-share: $0.70 (33% lower)
2010 earnings-per-share: $0.93 (33% improve)
2011 earnings-per-share: $1.10 (18% improve)
Gorman-Rupp suffered important declines through the Nice Recession. The corporate skilled a rebound shortly after this era, because the economic system started to get well and demand improved. The corporate established a brand new excessive for earnings per share shortly after the downturn.
On the similar time, the corporate continued to extend its dividend, simply because it had for many years.
Whereas enterprise outcomes are prone to undergo through the subsequent financial downturn, we consider that the tailwinds supporting the corporate’s enterprise mannequin will allow continued dividend development.
Supply: Investor Presentation
Valuation and Anticipated Returns
Shares of Gorman-Rupp are buying and selling at 18.2 instances our anticipated 2025 earnings per share of $2.10. We consider that truthful worth lies nearer to 23 instances earnings, which suggests an increasing P/E may improve annual returns by roughly 4.9% per 12 months over the following 5 years.
Between natural development and the flexibility so as to add key companies to its portfolio, we forecast that Gorman-Rupp can obtain a mean annual earnings-per-share development of 6% via 2030.
The dividend may even add to the inventory efficiency. Presently, Gorman-Rupp is yielding 1.9%, which tops the 1.2% common yield of the S&P 500 Index.
Due to this fact, Gorman-Rupp is projected to return 12.8% per 12 months on common via 2030. Nevertheless, we predict the inventory is a Maintain in our view.
Last Ideas
The Dividend Kings are an unique record of corporations which have established extraordinarily lengthy histories of dividend development.
This feat is so uncommon that there are simply 55 corporations that meet the lone requirement of no less than 5 many years of dividend development.
Gorman-Rupp is a comparatively new addition to this record. The corporate’s spectacular enterprise mannequin, capacity to make strategic acquisitions, and favorable business tailwinds ought to place it to proceed rising its dividend.
The inventory can also be moderately priced and has double-digit complete return potential over the following 5 years, incomes Gorman-Rupp a maintain advice.
Extra Studying
The next databases of shares include shares with very lengthy dividend or company histories, ripe for choice for dividend development buyers.
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