ATS (NYSE:ATS) vs. Generac (NYSE:GNRC) Critical Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ATS	0.77%	9.67%	3.74%
Generac	3.79%	14.55%	6.96%

Risk and Volatility

ATS has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Generac has a beta of 1.78, meaning that its share price is 78% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATS	$1.82 billion	1.76	-$20.16 million	$0.15	217.99
Generac	$4.21 billion	2.95	$159.55 million	$2.68	78.97

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

Institutional & Insider Ownership

75.8% of ATS shares are held by institutional investors. Comparatively, 84.0% of Generac shares are held by institutional investors. 2.7% of Generac shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for ATS and Generac, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATS	1	2	2	0	2.20
Generac	0	7	11	1	2.68

ATS presently has a consensus target price of $35.00, indicating a potential upside of 7.04%. Generac has a consensus target price of $234.63, indicating a potential upside of 10.86%. Given Generac’s stronger consensus rating and higher probable upside, analysts plainly believe Generac is more favorable than ATS.

Summary

Generac beats ATS on 14 of the 15 factors compared between the two stocks.

About ATS

ATS Corporation, together with its subsidiaries, provides automation solutions worldwide. The company is also involved in planning, designing, building, commissioning, and servicing automated manufacturing and assembly systems, including automation products and test solutions. In addition, it offers pre-automation services comprising discovery and analysis, concept development, simulation, and total cost of ownership modelling; post automation services, including training, process optimization, preventative maintenance, emergency and on-call support, spare parts, retooling, retrofits, and equipment relocation; and contract manufacturing services, as well as after sales and services. Further, the company provides engineering design, prototyping, process verification, specification writing, software and manufacturing process controls development, standard automation products/platforms, equipment design and build, third-party equipment qualification, procurement and integration, automation system installation, product line commissioning, validation, and documentation services. Additionally, it offers value engineering, supply chain management, and integration and manufacturing capabilities, as well as other automation products and solutions; and software and digital solutions comprising connected factory floor management systems to capture, analyze, and use real time machine performance data to troubleshoot, deliver process and product solutions, prevent equipment downtime, drive operational efficiency, and unlock performance for sustainable production improvements. ATS Corporation serves life sciences, transportation and mobility, consumer products, food and beverage, electronics, nuclear, packaging, warehousing and distribution, and energy markets. The company was formerly known as ATS Automation Tooling Systems Inc. and changed its name to ATS Corporation in November 2022. ATS Corporation was founded in 1978 and is headquartered in Cambridge, Canada.

About Generac

Generac Holdings Inc. designs, manufactures, and distributes various energy technology products and solution worldwide. The company offers residential automatic standby generators, automatic transfer switch, air-cooled engine residential standby generators, and liquid-cooled engine generators; Mobile Link, a remote monitoring system for home standby generators; residential storage solution, which consists of a system of batteries, an inverter, photovoltaic optimizers, power electronic controls, and other components; smart home solutions, such as smart thermostats and a suite of home monitoring products. It also provides smart home energy management devices and sensors for heating and cooling system; smart doorbell cameras; and portable and inverter generators; multiple portable battery solutions; manual transfer switches; outdoor power equipment, including trimmers, field and brush mowers, log splitters, stump grinders, chipper shredders, lawn and leaf vacuums, and pressure washers and water pumps; and battery-powered turf care products. In addition, the company offers commercial and industrial products comprising cleaner-burning natural gas fueled generators; light-commercial standby generators and related transfer switches; stationary generators; single-engine industrial generators; industrial standby generators; industrial transfer switches; light towers, mobile generators, commercial mobile pumps, heaters, dust-suppression equipment, and mobile energy storage systems; stationary energy storage system and related inverter products; and aftermarket service parts and product accessories. The company distributes its products through independent residential dealers, industrial distributors and dealers, national and regional retailers, e-commerce partners, electrical/HVAC/solar wholesalers, solar installers, catalogs, equipment rental companies, and other equipment distributors; and directly to end users. The company was founded in 1959 and is headquartered in Waukesha, Wisconsin.