Comparing Twin Disc (NASDAQ:TWIN) and Westport Fuel Systems (NASDAQ:WPRT)

Westport Fuel Systems (NASDAQ:WPRT) and Twin Disc (NASDAQ:TWIN) are both small-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Earnings and Valuation

This table compares Westport Fuel Systems and Twin Disc”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westport Fuel Systems	$8.50 million	3.91	-$61.63 million	($2.41)	-0.79
Twin Disc	$381.27 million	0.90	$27.08 million	$2.38	10.02

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

Institutional and Insider Ownership

21.3% of Westport Fuel Systems shares are held by institutional investors. Comparatively, 65.2% of Twin Disc shares are held by institutional investors. 0.8% of Westport Fuel Systems shares are held by company insiders. Comparatively, 22.1% of Twin Disc shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Westport Fuel Systems and Twin Disc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westport Fuel Systems	1	2	1	0	2.00
Twin Disc	0	1	2	0	2.67

Westport Fuel Systems presently has a consensus price target of $1.82, indicating a potential downside of 4.45%. Twin Disc has a consensus price target of $30.00, indicating a potential upside of 25.79%. Given Twin Disc’s stronger consensus rating and higher probable upside, analysts clearly believe Twin Disc is more favorable than Westport Fuel Systems.

Volatility and Risk

Westport Fuel Systems has a beta of 2.14, indicating that its stock price is 114% more volatile than the S&P 500. Comparatively, Twin Disc has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Profitability

This table compares Westport Fuel Systems and Twin Disc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westport Fuel Systems	-493.15%	-51.88%	-37.23%
Twin Disc	9.06%	7.19%	3.36%

Summary

Twin Disc beats Westport Fuel Systems on 12 of the 14 factors compared between the two stocks.

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.

About Twin Disc

Twin Disc, Incorporated engages in the design, manufacture, and sale of marine and heavy duty off-highway power transmission equipment in the United States, the Netherlands, China, Australia, Italy, and internationally. The company operates in two segments, Manufacturing and Distribution. Its principal products include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. The company also provides third-party manufactured products. It sells its products through a direct sales force and distributor network to customers primarily in the pleasure craft, commercial marine, patrol, and military marine markets, as well as in the energy and natural resources, government, agriculture, recycling, construction, oil and gas, and industrial markets. The company was incorporated in 1918 and is headquartered in Milwaukee, Wisconsin.