Shoals Technologies Group (NASDAQ:SHLS) versus nVent Electric (NYSE:NVT) Critical Review

Shoals Technologies Group (NASDAQ:SHLS) and nVent Electric (NYSE:NVT) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Earnings & Valuation

This table compares Shoals Technologies Group and nVent Electric”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shoals Technologies Group	$475.33 million	2.98	$33.57 million	$0.19	44.32
nVent Electric	$4.83 billion	5.50	$710.20 million	$3.66	44.89

nVent Electric has higher revenue and earnings than Shoals Technologies Group. Shoals Technologies Group is trading at a lower price-to-earnings ratio than nVent Electric, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Shoals Technologies Group and nVent Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shoals Technologies Group	5.41%	10.07%	6.38%
nVent Electric	12.38%	18.85%	10.30%

Institutional & Insider Ownership

90.1% of nVent Electric shares are held by institutional investors. 0.8% of Shoals Technologies Group shares are held by insiders. Comparatively, 1.7% of nVent Electric 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.

Volatility and Risk

Shoals Technologies Group has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, nVent Electric has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Shoals Technologies Group and nVent Electric, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoals Technologies Group	0	6	11	0	2.65
nVent Electric	0	2	15	2	3.00

Shoals Technologies Group presently has a consensus target price of $10.79, indicating a potential upside of 28.10%. nVent Electric has a consensus target price of $199.50, indicating a potential upside of 21.43%. Given Shoals Technologies Group’s higher probable upside, research analysts clearly believe Shoals Technologies Group is more favorable than nVent Electric.

Summary

nVent Electric beats Shoals Technologies Group on 13 of the 15 factors compared between the two stocks.

About Shoals Technologies Group

Shoals Technologies Group, Inc. provides electrical balance of system (EBOS) solutions and components for solar, battery energy, and electric vehicle (EV) charging applications in the United States and internationally. The company designs, manufactures, and sells system solutions for both homerun and combine-as-you-go wiring architectures, as well as offers technical support services. It provides EBOS components, including combiners; plug-n-play branch connectors and inline fuses; AC disconnects; recombiners; wireless monitoring; junction boxes; wire management; EV power cabinets; and battery energy storage systems cabinets, as well as cable assemblies, transition enclosures, and splice boxes. In addition, the company offers eMobility solutions, such as a power center, which combines equipment needed to protect the charging equipment and transform voltage levels from the electric utility to those needed on the respective site; quick connect solutions for chargers to connect to the Shoals system; big lead assembly (BLA) technology in the EV space to connect multiple chargers to a single power center; and a raceway system that protects the above ground EV BLAs in walk over and drive over applications. Further, it provides Snapshot IV, a solar operations and maintenance solution that monitors the specific voltage and current of individual solar panels and compares the results against the manufacturer's projected performance. The company sells its products to engineering, procurement, and construction firms that build solar energy projects; utilities; solar developers, independent power producers; solar module manufacturers; and charge point operators. Shoals Technologies Group, Inc. was founded in 1996 and is headquartered in Portland, Tennessee.

About nVent Electric

nVent Electric plc, together with its subsidiaries, designs, manufactures, markets, installs, and services electrical connection and protection solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company operates through three segments: Enclosures, Electrical & Fastening Solutions, and Thermal Management. The Enclosures segment provides solutions to protect electronics and data in mission critical applications, including data solutions. This segment also offers digital and automation solutions, system integrations, and global services. The Electrical & Fastening Solutions segment provides solutions that connect and protect power and data infrastructure. This segment also offers power connections, fastening solutions, cable management solutions, grounding and bonding systems, and tools and test instruments. The Thermal Management segment offers heat management solutions that protect people and assets. This segment includes heat tracing for freeze protection and process temperature maintenance and control; pipe freeze protection, surface deicing, hot water temperature maintenance, floor heating, fire-rated wiring, and leak detection; and heat trace systems, connected controls, remote monitoring, and annual service programs. The company markets its products through electrical distributors, contractors, and original equipment manufacturers under the CADDY, ERICO, GARDNER BENDER, HOFFMAN, ILSCO, RAYCHEM, SCHROFF, and TRACER brand names. Its products are used for various applications, such as industrial, commercial and residential, infrastructure, and energy. nVent Electric plc was founded in 1903 and is based in London, the United Kingdom.