Head to Head Analysis: Power Solutions International (NASDAQ:PSIX) versus Westport Fuel Systems (NASDAQ:WPRT)

Power Solutions International (NASDAQ:PSIX) and Westport Fuel Systems (NASDAQ:WPRT) are both small-cap auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Earnings and Valuation

This table compares Power Solutions International and Westport Fuel Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Power Solutions International	$436.42 million	1.96	$26.31 million	$2.36	15.72
Westport Fuel Systems	$331.80 million	0.24	-$49.72 million	($1.49)	-3.07

Power Solutions International has higher revenue and earnings than Westport Fuel Systems. Westport Fuel Systems is trading at a lower price-to-earnings ratio than Power Solutions International, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Power Solutions International has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Westport Fuel Systems has a beta of 2.93, suggesting that its share price is 193% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Power Solutions International and Westport Fuel Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Power Solutions International	0	0	0	0	0.00
Westport Fuel Systems	0	2	2	0	2.50

Westport Fuel Systems has a consensus target price of $14.13, suggesting a potential upside of 209.08%. Given Westport Fuel Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Westport Fuel Systems is more favorable than Power Solutions International.

Profitability

This table compares Power Solutions International and Westport Fuel Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Power Solutions International	12.46%	293.35%	15.94%
Westport Fuel Systems	-8.01%	-25.57%	-11.61%

Institutional & Insider Ownership

22.3% of Power Solutions International shares are held by institutional investors. Comparatively, 21.3% of Westport Fuel Systems shares are held by institutional investors. 0.6% of Power Solutions International shares are held by insiders. Comparatively, 0.8% of Westport Fuel Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Power Solutions International beats Westport Fuel Systems on 9 of the 14 factors compared between the two stocks.

About Power Solutions International

Power Solutions International, Inc. engages in the design, manufacture, and trade of power systems and electrical power generation equipment. The firm provides integrated turnkey solutions to global original equipment manufacturers and end-user customers within the energy, industrial, and transportation end markets. The company was founded by Gary S. Winemaster, Kenneth J. Winemaster, and William Winemaster in February 1985 and is headquartered in Wood Dale, IL.

About Westport Fuel Systems

Westport Fuel Systems Inc. engages in the engineering, manufacturing, and supplying alternative fuel systems and components for use in transportation applications in Europe, Asia, North America, South America, and internationally. The company operates through two segments, Original Equipment Manufacturers and Independent Aftermarket. It offers alternative fuel systems and components, such as liquefied petroleum gas (LPG), compressed natural gas (CNG), liquefied natural gas (LNG), renewable natural gas or biomethane, and hydrogen; and pressure regulators, injectors, electronic control units, valves and filters, complete bi-fuel, mono-fuel and dual-fuel LPG and natural gas conversion kits and high-pressure hydrogen components. The company provides Westport’s LNG high pressure direct injection 2.0 fuel system and bi-fuel products; offers turnkey solutions covering all process phases, including prototyping, development, calibration, validation, homologation, vehicle conversion and logistic services, as well as systems for diesel-powered vehicles; and supplies hydrogen fuel system components for light, medium, and heavy-duty applications. It offers its products under the AFS, BRC, Emer, GFI, HPDI, Stako, Prins, Zavoli, OMVL, TA Gas Technology, Vialle, and Valtek brands. The company was formerly known as Westport Innovations Inc. and changed its name to Westport Fuel Systems Inc. in June 2016. Westport Fuel Systems Inc. was incorporated in 1995 and is headquartered in Vancouver, Canada.