Powell Industries (NASDAQ:POWL) & Eaton (NYSE:ETN) Head to Head Contrast

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

Earnings & Valuation

This table compares Eaton and Powell Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eaton	$26.63 billion	4.70	$3.79 billion	$10.00	32.22
Powell Industries	$1.10 billion	3.96	$180.75 million	$14.85	24.34

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

Volatility and Risk

Eaton has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Powell Industries has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Dividends

Eaton pays an annual dividend of $4.16 per share and has a dividend yield of 1.3%. Powell Industries pays an annual dividend of $1.07 per share and has a dividend yield of 0.3%. Eaton pays out 41.6% of its earnings in the form of a dividend. Powell Industries pays out 7.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Powell Industries has increased its dividend for 3 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eaton	14.74%	24.36%	11.45%
Powell Industries	16.37%	31.80%	17.94%

Analyst Ratings

This is a summary of recent ratings and price targets for Eaton and Powell Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eaton	0	7	17	1	2.76
Powell Industries	0	0	2	0	3.00

Eaton currently has a consensus target price of $393.05, suggesting a potential upside of 21.98%. Powell Industries has a consensus target price of $350.00, suggesting a potential downside of 3.15%. Given Eaton’s higher possible upside, equities research analysts plainly believe Eaton is more favorable than Powell Industries.

Institutional and Insider Ownership

83.0% of Eaton shares are owned by institutional investors. Comparatively, 89.8% of Powell Industries shares are owned by institutional investors. 0.3% of Eaton shares are owned by insiders. Comparatively, 2.2% of Powell Industries 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.

About Eaton

Eaton Corporation plc operates as a power management company worldwide. The company’s Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems. Its Aerospace segment offers pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, and adapters and regulators; oxygen generation system, payload carriages, and thermal management products; and wiring connectors and cables, as well as hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, and related after-market customers, as well as industrial applications. The company’s Vehicle segment offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry. Its eMobility segment provides voltage inverters, converters, fuses, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. Eaton Corporation plc was founded in 1911 and is based in Dublin, Ireland.

About Powell Industries

Powell Industries, Inc., together with its subsidiaries, designs, develops, manufactures, sells, and services custom-engineered equipment and systems. The company’s principal products include integrated power control room substations, custom-engineered modules, electrical houses, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers, switches, and bus duct systems, as well as traditional and arc-resistant distribution switchgears and control gears. Its products have application in voltages ranging from 480 volts to 38,000 volts. The company also provide field service inspection, installation, commissioning, modification and repair, spare parts, retrofit and retrofill components for existing systems, and replacement circuit breakers for switchgear. It serves onshore and offshore production, liquefied natural gas facilities and terminals, pipelines, refineries, and petrochemical plants, as well as electric utility, light rail traction power, mining and metals, pulp and paper, data centers and other municipal, commercial, and industrial markets. The company has operations in the United States, Canada, the Middle East, Africa, Europe, Mexico, and Central and South America. Powell Industries, Inc. was founded in 1947 and is headquartered in Houston, Texas.