Critical Review: Powell Industries (NASDAQ:POWL) & SolarEdge Technologies (NASDAQ:SEDG)

Powell Industries (NASDAQ:POWL) and SolarEdge Technologies (NASDAQ:SEDG) are both mid-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.

Profitability

This table compares Powell Industries and SolarEdge Technologies’ 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%
SolarEdge Technologies	-20.29%	-29.17%	-5.62%

Risk and Volatility

Powell Industries has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, SolarEdge Technologies has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Insider and Institutional Ownership

89.8% of Powell Industries shares are owned by institutional investors. Comparatively, 95.1% of SolarEdge Technologies shares are owned by institutional investors. 2.2% of Powell Industries shares are owned by insiders. Comparatively, 1.0% of SolarEdge Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Powell Industries and SolarEdge Technologies”s top-line 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	5.59	$180.75 million	$5.21	32.54
SolarEdge Technologies	$1.33 billion	1.41	-$405.45 million	($4.50)	-6.78

Powell Industries has higher earnings, but lower revenue than SolarEdge Technologies. SolarEdge Technologies 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 Ratings

This is a summary of current ratings and target prices for Powell Industries and SolarEdge Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Powell Industries	0	3	2	2	2.86
SolarEdge Technologies	5	11	2	0	1.83

Powell Industries currently has a consensus price target of $187.92, suggesting a potential upside of 10.85%. SolarEdge Technologies has a consensus price target of $38.73, suggesting a potential upside of 26.91%. Given SolarEdge Technologies’ higher possible upside, analysts plainly believe SolarEdge Technologies is more favorable than Powell Industries.

Summary

Powell Industries beats SolarEdge Technologies on 10 of the 14 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 SolarEdge Technologies

SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, manufactures, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in the United States, Germany, the Netherlands, Italy, rest of Europe, and internationally. It operates in two segments, Solar and Energy Storage. The Solar segment offers power optimizers, inverters, batteries, storage solutions, electric vehicle chargers, smart tracking solutions, and smart energy management software products; Monitoring platform, a cloud-based monitoring platform, which collects power, voltage, current, and system data sent from inverters and power optimizers; and MySolarEdge app, that enables system owners to track their real-time system production and household energy consumption. This segment also provides Designer platform, an web-based tool that helps solar professionals to plan, build, and validate residential and commercial systems; Mapper application for registering the physical layout of new PV sites installed with DC optimized inverter systems; SetApp application that activates and configurate inverters; and grid services. The Energy Storage segment provides lithium-ion cells and containerized battery systems (BESS) solutions for commercial, industrial, and utility markets; modules and racks; purpose-built components and solutions, and hardware and software tools; and pre and post sales engineering support for designing, building, and managing battery and system solutions. The company offers e-mobility products, automated machines, and UPS products; and pre-sales support, ongoing trainings, and technical support and after installation services. It sells its products through solar installers and distributors, electrical equipment wholesalers, and PV module manufacturers, as well as engineering, procurement, and construction firms. SolarEdge Technologies, Inc. was incorporated in 2006 and is headquartered in Herzliya, Israel.