Analyzing Generac (NYSE:GNRC) and Otis Worldwide (NYSE:OTIS)

Generac (NYSE:GNRC) and Otis Worldwide (NYSE:OTIS) are both large-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

84.0% of Generac shares are held by institutional investors. Comparatively, 88.0% of Otis Worldwide shares are held by institutional investors. 2.7% of Generac shares are held by insiders. Comparatively, 0.2% of Otis Worldwide shares are held 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.

Earnings & Valuation

This table compares Generac and Otis Worldwide”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Generac	$4.21 billion	3.05	$159.55 million	$2.68	81.58
Otis Worldwide	$14.43 billion	2.13	$1.38 billion	$3.50	22.73

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Generac and Otis Worldwide, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Generac	0	7	11	1	2.68
Otis Worldwide	1	7	3	0	2.18

Generac presently has a consensus target price of $233.94, indicating a potential upside of 7.00%. Otis Worldwide has a consensus target price of $99.18, indicating a potential upside of 24.65%. Given Otis Worldwide’s higher probable upside, analysts plainly believe Otis Worldwide is more favorable than Generac.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Generac	3.79%	14.55%	6.96%
Otis Worldwide	10.11%	-29.39%	14.86%

Volatility and Risk

Generac has a beta of 1.78, suggesting that its share price is 78% more volatile than the S&P 500. Comparatively, Otis Worldwide has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Summary

Generac beats Otis Worldwide on 8 of the 15 factors compared between the two stocks.

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.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.