Twin Disc, (NASDAQ: TWIN) and Pioneer Power Solutions (NASDAQ:PPSI) are both small-cap industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

49.1% of Twin Disc, shares are held by institutional investors. Comparatively, 19.5% of Pioneer Power Solutions shares are held by institutional investors. 27.5% of Twin Disc, shares are held by company insiders. Comparatively, 54.7% of Pioneer Power Solutions shares are held by company 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Twin Disc, and Pioneer Power Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Twin Disc, 0 1 0 0 2.00
Pioneer Power Solutions 0 0 1 0 3.00

Twin Disc, presently has a consensus target price of $24.00, indicating a potential upside of 23.97%. Pioneer Power Solutions has a consensus target price of $8.00, indicating a potential upside of 3.83%. Given Twin Disc,’s higher possible upside, analysts clearly believe Twin Disc, is more favorable than Pioneer Power Solutions.

Volatility & Risk

Twin Disc, has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500. Comparatively, Pioneer Power Solutions has a beta of 2.36, indicating that its stock price is 136% more volatile than the S&P 500.

Profitability

This table compares Twin Disc, and Pioneer Power Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Twin Disc, -3.74% -5.02% -2.76%
Pioneer Power Solutions 0.09% 21.37% 7.31%

Valuation and Earnings

This table compares Twin Disc, and Pioneer Power Solutions’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Twin Disc, $168.18 million 1.33 $2.48 million ($0.56) -34.57
Pioneer Power Solutions $116.06 million 0.58 $6.57 million $0.02 385.25

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

Summary

Pioneer Power Solutions beats Twin Disc, on 9 of the 13 factors compared between the two stocks.

Twin Disc, Company Profile

Twin Disc, Incorporated designs, manufactures and sells marine and heavy duty off-highway power transmission equipment. The Company operates through two segments: manufacturing and distribution. Its products include marine transmissions, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and controls systems. Its industrial products include clutches and pump drives sold to the agriculture, recycling, construction, and oil and gas markets. Its land-based transmission products include applications for oilfield and natural gas, military, and airport rescue and firefighting. Its marine and propulsion systems include marine transmission, controls, surface drives, propellers and boat management systems for the commercial, pleasure craft and patrol boat markets. Its other products include non-Company manufactured product sold through Company-owned distribution entities.

Pioneer Power Solutions Company Profile

Pioneer Power Solutions, Inc. manufactures, sells and services a range of specialty electrical transmission, distribution and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets. The Company operates through two segments: Transmission & Distribution Solutions (T&D Solutions) and Critical Power Solutions (Critical Power). The T&D Solutions segment consists of two primary product categories: electrical transformers and switchgear. These solutions are marketed principally through its Pioneer Transformers Ltd., Jefferson Electric, Inc. and Pioneer CEP brand names. Its Critical Power business provides customers with power generation equipment, paralleling switchgear, related electrical distribution infrastructure, and a data collection and monitoring platform. These solutions are marketed by its operations in Minneapolis, doing business under the Pioneer Critical Power Inc. and Titan Energy Systems Inc. brand names.

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