Preformed Line Products (NASDAQ:PLPC – Get Free Report) and nVent Electric (NYSE:NVT – Get Free Report) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.
Institutional and Insider Ownership
41.2% of Preformed Line Products shares are held by institutional investors. Comparatively, 90.0% of nVent Electric shares are held by institutional investors. 33.0% of Preformed Line Products shares are held by insiders. Comparatively, 1.7% of nVent Electric shares are held by 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.
Valuation and Earnings
This table compares Preformed Line Products and nVent Electric”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Preformed Line Products | $669.34 million | 3.04 | $35.28 million | $8.88 | 46.89 |
| nVent Electric | $3.89 billion | 6.68 | $710.20 million | $3.66 | 43.89 |
nVent Electric has higher revenue and earnings than Preformed Line Products. nVent Electric is trading at a lower price-to-earnings ratio than Preformed Line Products, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Preformed Line Products and nVent Electric, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Preformed Line Products | 0 | 1 | 0 | 1 | 3.00 |
| nVent Electric | 0 | 1 | 14 | 3 | 3.11 |
Preformed Line Products currently has a consensus price target of $275.00, suggesting a potential downside of 33.95%. nVent Electric has a consensus price target of $198.67, suggesting a potential upside of 23.69%. Given nVent Electric’s stronger consensus rating and higher possible upside, analysts plainly believe nVent Electric is more favorable than Preformed Line Products.
Risk and Volatility
Preformed Line Products has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, nVent Electric has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.
Dividends
Preformed Line Products pays an annual dividend of $0.84 per share and has a dividend yield of 0.2%. nVent Electric pays an annual dividend of $0.84 per share and has a dividend yield of 0.5%. Preformed Line Products pays out 9.5% of its earnings in the form of a dividend. nVent Electric pays out 23.0% 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. nVent Electric has raised its dividend for 2 consecutive years. nVent Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Preformed Line Products and nVent Electric’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Preformed Line Products | 5.82% | 10.64% | 7.65% |
| nVent Electric | 12.38% | 18.85% | 10.30% |
Summary
nVent Electric beats Preformed Line Products on 14 of the 18 factors compared between the two stocks.
About Preformed Line Products
Preformed Line Products Company, together with its subsidiaries, designs and manufactures products and systems that are used in the construction and maintenance of overhead, ground-mounted, and underground networks for the energy, telecommunication, cable, data communication, and other industries. The company offers optical ground wire products to support, protect, terminate, and splice transmission and distribution lines, as well as bolted, welded, and compressed connectors for substations; and string hardware products, polymer insulators, wildlife protection, substation fittings, and motion control devices. It also provides rugged outside plant closures to protect and support wireline and wireless networks, such as copper cable or fiber optic cable from moisture, environmental hazards, and other contaminants; and hardware assemblies, pole line hardware, plastic products, cable dynamics/vibration solutions, interior/exterior connectors, tools, and urethane solutions that are used by energy, renewable energy, communications, cable, and special industries for various applications. The company serves public and private energy utilities and communication companies, cable operators, governmental agencies, contractors and subcontractors, distributors, and value-added resellers in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It markets its products through a direct sales force, as well as through manufacturing representatives. Preformed Line Products Company was incorporated in 1947 and is headquartered in Mayfield Village, Ohio.
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.
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