Generac (NYSE:GNRC) versus Powell Industries (NASDAQ:POWL) Critical Contrast

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

Earnings & Valuation

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

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

Powell Industries has higher earnings, but lower revenue 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.

Institutional & Insider Ownership

89.8% of Powell Industries shares are owned by institutional investors. Comparatively, 84.0% of Generac shares are owned by institutional investors. 2.2% of Powell Industries shares are owned by insiders. Comparatively, 2.4% of Generac shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Powell Industries and Generac, as reported by MarketBeat.

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

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

Profitability

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

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

Summary

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

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.

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.