Financial Review: Hubbell (NYSE:HUBB) vs. Power Solutions International (NASDAQ:PSIX)

Hubbell (NYSE:HUBB) and Power Solutions International (NASDAQ:PSIX) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Profitability

This table compares Hubbell and Power Solutions International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hubbell	14.49%	27.11%	11.48%
Power Solutions International	10.03%	37.73%	15.58%

Valuation and Earnings

This table compares Hubbell and Power Solutions International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hubbell	$5.84 billion	4.16	$887.10 million	$16.89	27.22
Power Solutions International	$722.41 million	1.55	$113.99 million	$2.95	16.42

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

Volatility and Risk

Hubbell has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Power Solutions International has a beta of 2.01, suggesting that its share price is 101% more volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hubbell	0	5	5	1	2.64
Power Solutions International	0	1	1	1	3.00

Hubbell currently has a consensus target price of $552.67, suggesting a potential upside of 20.21%. Power Solutions International has a consensus target price of $99.95, suggesting a potential upside of 106.38%. Given Power Solutions International’s stronger consensus rating and higher possible upside, analysts plainly believe Power Solutions International is more favorable than Hubbell.

Institutional & Insider Ownership

88.2% of Hubbell shares are held by institutional investors. Comparatively, 22.3% of Power Solutions International shares are held by institutional investors. 0.6% of Hubbell shares are held by company insiders. Comparatively, 0.3% of Power Solutions International shares are held by company 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.

Summary

Hubbell beats Power Solutions International on 9 of the 14 factors compared between the two stocks.

About Hubbell

Hubbell Incorporated, together with its subsidiaries, designs, manufactures, and sells electrical and utility solutions in the United States and internationally. It operates through two segments, Electrical Solutions and Utility Solutions. The Electrical Solution segment offers standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures, and other electrical equipment for use in industrial, commercial, and institutional facilities by electrical contractors, maintenance personnel, electricians, utilities, and telecommunications companies, as well as components and assemblies. It also designs and manufactures various industrial controls, and communication systems for use in the non-residential and industrial markets, as well as in the oil and gas, and mining industries. This segment sells its products through electrical and industrial distributors, home centers, retail and hardware outlets, lighting showrooms, and residential product-oriented internet sites; and special application products primarily through wholesale distributors to contractors, industrial customers, and original equipment manufacturers. The Utility Solution segment designs, manufactures, and sells electrical distribution, transmission, substation, and telecommunications products, such as arresters, insulators, connectors, anchors, bushings, and enclosures cutoffs and switches; and utility infrastructure products, including smart meters, communications systems, and protection and control devices. This segment sells its products to distributors. Its brand portfolio includes Hubbell, Kellems, Bryant, Burndy, CMC, Bell, TayMac, Wiegmann, Killark, Hawke, Aclara, Fargo, Quazite, Hot Box, etc. The company was founded in 1888 and is headquartered in Shelton, Connecticut.

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.