Head to Head Analysis: Powell Industries (NASDAQ:POWL) vs. Generac (NYSE:GNRC)

Generac (NYSE:GNRC) and Powell Industries (NASDAQ:POWL) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Profitability

This table compares Generac and Powell Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Generac	6.52%	18.78%	9.12%
Powell Industries	16.49%	27.51%	15.94%

Institutional & Insider Ownership

84.0% of Generac shares are held by institutional investors. Comparatively, 89.8% of Powell Industries shares are held by institutional investors. 2.4% of Generac shares are held by insiders. Comparatively, 2.2% of Powell Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Generac and Powell Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Generac	0	7	13	2	2.77
Powell Industries	0	3	2	2	2.86

Generac currently has a consensus target price of $289.82, suggesting a potential upside of 59.34%. Powell Industries has a consensus target price of $187.92, suggesting a potential upside of 35.96%. Given Generac’s higher possible upside, analysts clearly believe Generac is more favorable than Powell Industries.

Earnings & Valuation

This table compares Generac and Powell Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Generac	$4.62 billion	2.32	$159.55 million	$5.05	36.02
Powell Industries	$1.10 billion	4.56	$180.75 million	$5.21	26.53

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

Volatility and Risk

Generac has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500. Comparatively, Powell Industries has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Summary

Powell Industries beats Generac on 8 of the 14 factors compared between the two stocks.

About Generac

Generac Holdings Inc. designs and manufactures backup power generation equipment and energy technology solutions. Its products include home standby and portable generators, as well as power systems for commercial, industrial, and other applications. The company also offers energy storage and management products, solar-related solutions, and services that help customers monitor and manage power use. Generac serves residential, commercial, and industrial customers, with a presence in North America and other markets around the world.

About Powell Industries

Powell Industries designs, manufactures and services custom-engineered electrical equipment and systems used to distribute, control and monitor electrical power. Its offerings include electrical switchgear, control rooms and integrated power-control systems for industrial and utility applications. The company serves customers in industries such as oil and gas, petrochemicals, utilities, mining and transportation. Its equipment is used in facilities including power plants, refineries and other energy and industrial sites, in North America and international markets.