Analyzing Power Solutions International (NASDAQ:PSIX) and nVent Electric (NYSE:NVT)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Power Solutions International and nVent Electric, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Power Solutions International	0	1	1	1	3.00
nVent Electric	0	0	14	3	3.18

Power Solutions International presently has a consensus target price of $99.95, suggesting a potential upside of 117.90%. nVent Electric has a consensus target price of $199.86, suggesting a potential upside of 26.40%. Given Power Solutions International’s higher probable upside, equities analysts clearly believe Power Solutions International is more favorable than nVent Electric.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Power Solutions International	10.03%	37.73%	15.58%
nVent Electric	12.38%	18.85%	10.30%

Insider & Institutional Ownership

22.3% of Power Solutions International shares are held by institutional investors. Comparatively, 90.0% of nVent Electric shares are held by institutional investors. 0.3% of Power Solutions International shares are held by insiders. Comparatively, 1.7% of nVent Electric shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Power Solutions International has a beta of 2.11, meaning that its stock price is 111% more volatile than the S&P 500. Comparatively, nVent Electric has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Power Solutions International	$722.41 million	1.46	$113.99 million	$2.95	15.55
nVent Electric	$3.89 billion	6.57	$710.20 million	$3.66	43.20

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

Summary

nVent Electric beats Power Solutions International on 11 of the 15 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 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.