The Gorman-Rupp Enigma: A Cashflow Gumshoe’s Deep Dive

Alright, listen up, folks. Tucker Cashflow Gumshoe here, and we’re diving into the latest mystery surrounding Gorman-Rupp (GRC). This pump company’s stock just jumped 10.2% after dropping some strong Q2 numbers, and they’ve been doling out dividends longer than most of us have been alive. But is this just a flash in the pan, or has the bull case finally changed? Let’s crack this case wide open.

The Recent Rally: A Glimpse of Greatness or a Temporary High?

First off, let’s talk about that 10.2% pop in stock price. That’s not chump change, folks. Gorman-Rupp reported Q2 2025 sales of $179.05 million, and their net income was looking mighty fine too. Now, this isn’t just some one-hit wonder. They’ve been working on this comeback for a while. Remember those pricing increases they rolled out last year? Well, they paid off in Q4 2024 with a 1.3% year-over-year revenue bump.

But hold your horses. This ain’t the first time Gorman-Rupp has had us dancing. Back in February 2022, they dropped a stinker—earnings per share came in at 25 cents, eight cents below estimates, and revenue missed by over $4 million. Sure, revenue was up 14% year-over-year, but that’s the thing with Gorman-Rupp: they’re as cyclical as a New York cabbie’s mood swings. One quarter they’re printing money, the next they’re scrambling to meet expectations.

The Dividend Streak: A Half-Century of Consistency

Now, let’s talk about the real star of the show—the dividend. Gorman-Rupp just announced a $0.185 per share dividend, payable on June 10th. And get this—they’ve been increasing that dividend for 52 straight years. That’s right, folks, 52 years. That’s longer than most of us have been alive, and it’s a hell of a track record.

The current dividend yield sits at about 1.95%, and the growth rate over the last twelve months is 2.86%. That’s not too shabby, especially in this low-interest-rate environment. But here’s the kicker: can they keep it up? The payout ratio is healthy, but the company’s earnings are as volatile as a stock market on a Monday morning. One bad quarter, and that dividend streak could be in jeopardy.

The Future: A Mixed Bag of Opportunities and Risks

Looking ahead, the outlook is as mixed as a New York deli sandwich. On one hand, the stock’s P/E ratio is sitting at 23x as of July 2025, which might mean it’s overvalued. And let’s not forget the past three years—total loss of 2.2% (including dividends) compared to a market gain of about 11%. Ouch.

But wait, there’s hope. Forecasts are predicting a whopping 18.7% increase in earnings and 4.1% in revenue growth. EPS growth is expected to hit 18.5%. That’s some serious upside, folks. And it’s not just hot air—recent acquisitions like Fill-Rite and a strong backlog are driving this growth. But here’s the catch: Gorman-Rupp’s earnings are as cyclical as a rollercoaster. One minute they’re up, the next they’re down. It’s a risky game, and investors need to be ready for the ride.

The Bottom Line: Is Gorman-Rupp Worth the Gamble?

So, what’s the verdict? Gorman-Rupp is a company with a lot going for it—a strong dividend history, recent growth, and a solid backlog. But it’s also a company with a history of volatility and a stock that might be overvalued. The bull case has changed, but it’s not without its risks.

If you’re an income-focused investor, Gorman-Rupp might still be a solid play. That dividend streak is nothing to sneeze at, and the company’s commitment to shareholder returns is impressive. But if you’re looking for steady growth, you might want to think twice. The cyclical nature of their business means you’re in for a wild ride.

At the end of the day, it’s all about risk tolerance. Gorman-Rupp is a company that’s been around the block, and they know how to navigate tough times. But in this market, nothing’s guaranteed. So, do your homework, weigh the risks, and decide if Gorman-Rupp is the right fit for your portfolio. And remember, folks, even the best detectives sometimes get it wrong. Stay sharp, stay informed, and happy investing.