Critical Analysis: Nextpower (NASDAQ:NXT) and LeGrand (OTCMKTS:LGRDY)

LeGrand (OTCMKTS:LGRDY) and Nextpower (NASDAQ:NXT) are both large-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Valuation & Earnings

This table compares LeGrand and Nextpower”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LeGrand	$10.72 billion	3.38	$1.41 billion	$1.16	23.83
Nextpower	$3.56 billion	3.36	$585.88 million	$3.86	20.44

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

Profitability

This table compares LeGrand and Nextpower’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LeGrand	13.01%	17.74%	7.34%
Nextpower	16.36%	26.29%	15.02%

Risk and Volatility

LeGrand has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Nextpower has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for LeGrand and Nextpower, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LeGrand	0	3	5	2	2.90
Nextpower	0	4	23	1	2.89

Nextpower has a consensus price target of $139.77, indicating a potential upside of 77.17%. Given Nextpower’s higher probable upside, analysts plainly believe Nextpower is more favorable than LeGrand.

Insider & Institutional Ownership

67.4% of Nextpower shares are held by institutional investors. 0.8% of Nextpower shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Nextpower beats LeGrand on 9 of the 15 factors compared between the two stocks.

About LeGrand

Legrand SA, together with its subsidiaries, manufactures, distributes, and sells electrical and digital building infrastructures in Europe, North and Central America, and internationally. The company offers energy distribution, protection, and management solutions, such as electric vehicle charging, residential and small commercial panels, switchboards and power cabinets, and UPS devices; and wiring devices, connected home and building control solutions, and guestroom solutions, as well as back, junction, DCL, and floor boxes. It also provides security, communication, and network solutions, including access security, digital home networks, emergency lighting, fire alarms, IT networks, intercom and door entry, and nurse call systems; conduits and cable management solutions comprising trunking, ducts, tubes, floor boxes, columns and feeders, and workstation solutions; industrial products, such as enclosures, connections, transformers and power supply, marking accessories and cable ties, motor control and protection, fuse protection, and industrial plugs and sockets, as well as control, button, and signaling products; installation accessories, including wiring accessories, extension cords, multi-outlet units, cable ties and fasteners, and connection boxes and terminals; and lighting products and accessories. The company's products are used in hotels, offices, data centers, shopping centers, health care, industrial, and residential buildings. It also exports its products to approximately 170 countries. Legrand SA was founded in 1865 and is headquartered in Limoges, France.

About Nextpower

Nextpower, formerly known as Nextracker, an energy solutions company, provides solar trackers and software solutions for utility-scale and distributed generation solar projects in the United States and internationally. The company offers tracking solutions, which includes NX Horizon, a solar tracking solution; and NX Horizon-XTR, a terrain-following tracker designed to expand the addressable market for trackers on sites with sloped, uneven, and challenging terrain. It also provides TrueCapture, a self-adjusting tracker control system, which boosts solar power plant production by optimizing the position of individual tracker row in response to site features, such as varying topography and changing weather conditions; and NX Navigator, that assists solar power plant owners and operators in monitoring, controlling, and protecting their solar projects. The company was founded in 2013 and is headquartered in Fremont, California. As of March 31, 2024 Nextracker Inc. (Nextpower) was formerly a subsidiary of Flex Ltd.