Critical Comparison: LeGrand (OTCMKTS:LGRDY) vs. Powell Industries (NASDAQ:POWL)

Powell Industries (NASDAQ:POWL) and LeGrand (OTCMKTS:LGRDY) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Profitability

This table compares Powell Industries and LeGrand’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%
LeGrand	13.01%	17.83%	7.55%

Insider & Institutional Ownership

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

Dividends

Powell Industries pays an annual dividend of $0.36 per share and has a dividend yield of 0.2%. LeGrand pays an annual dividend of $0.34 per share and has a dividend yield of 1.1%. Powell Industries pays out 6.9% of its earnings in the form of a dividend. LeGrand pays out 29.3% 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.

Valuation and Earnings

This table compares Powell Industries and LeGrand”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Powell Industries	$1.10 billion	6.52	$180.75 million	$5.21	37.94
LeGrand	$10.72 billion	3.84	$1.41 billion	$1.16	27.08

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Powell Industries and LeGrand, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Powell Industries	0	3	2	2	2.86
LeGrand	0	6	3	1	2.50

Powell Industries currently has a consensus target price of $215.42, indicating a potential upside of 8.98%. Given Powell Industries’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Powell Industries is more favorable than LeGrand.

Volatility & Risk

Powell Industries has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, LeGrand has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Summary

Powell Industries beats LeGrand on 14 of the 18 factors compared between the two stocks.

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.

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.