Critical Contrast: Powell Industries (NASDAQ:POWL) vs. Vestas Wind Systems AS (OTCMKTS:VWDRY)

Vestas Wind Systems AS (OTCMKTS:VWDRY) and Powell Industries (NASDAQ:POWL) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

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

Dividends

Vestas Wind Systems AS pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Powell Industries pays an annual dividend of $1.07 per share and has a dividend yield of 0.5%. Vestas Wind Systems AS pays out 10.0% of its earnings in the form of a dividend. Powell Industries pays out 7.5% 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 raised its dividend for 3 consecutive years. Powell Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Vestas Wind Systems AS has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, Powell Industries has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Vestas Wind Systems AS and Powell Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vestas Wind Systems AS	3.15%	17.84%	2.36%
Powell Industries	16.00%	35.43%	18.87%

Earnings & Valuation

This table compares Vestas Wind Systems AS 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
Vestas Wind Systems AS	$18.72 billion	1.00	$539.97 million	$0.20	30.95
Powell Industries	$1.01 billion	2.72	$149.85 million	$14.23	16.04

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Vestas Wind Systems AS and Powell Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vestas Wind Systems AS	0	0	1	2	3.67
Powell Industries	0	0	1	1	3.50

Powell Industries has a consensus price target of $312.00, suggesting a potential upside of 36.69%. Given Powell Industries’ higher probable upside, analysts clearly believe Powell Industries is more favorable than Vestas Wind Systems AS.

Summary

Powell Industries beats Vestas Wind Systems AS on 11 of the 17 factors compared between the two stocks.

About Vestas Wind Systems AS

Vestas Wind Systems A/S engages in the design, manufacture, installation, and services of wind turbines the United States, Denmark, and internationally. It operates in two segments, Power Solutions and Service. The Power Solutions segment offers onshore and offshore wind power plants, wind turbines, development sites, etc. The Service segment engages in the sale of service contracts, spare parts, and related activities. Vestas Wind Systems A/S was founded in 1898 and is headquartered in Aarhus, Denmark.

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.