Critical Contrast: ABB (ABB) vs. Pioneer Power Solutions (PPSI)

Pioneer Power Solutions (NASDAQ: PPSI) and ABB (NYSE:ABB) are both industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

19.5% of Pioneer Power Solutions shares are owned by institutional investors. Comparatively, 4.4% of ABB shares are owned by institutional investors. 54.7% of Pioneer Power Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Pioneer Power Solutions has a beta of 2.29, suggesting that its share price is 129% more volatile than the S&P 500. Comparatively, ABB has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Pioneer Power Solutions and ABB, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pioneer Power Solutions 0 0 1 0 3.00
ABB 2 5 5 0 2.25

Pioneer Power Solutions currently has a consensus price target of $8.00, suggesting a potential upside of 16.79%. ABB has a consensus price target of $23.00, suggesting a potential downside of 5.85%. Given Pioneer Power Solutions’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Pioneer Power Solutions is more favorable than ABB.

Profitability

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

Net Margins Return on Equity Return on Assets
Pioneer Power Solutions 0.09% 21.37% 7.31%
ABB 6.87% 18.62% 6.55%

Dividends

ABB pays an annual dividend of $0.73 per share and has a dividend yield of 3.0%. Pioneer Power Solutions does not pay a dividend. ABB pays out 67.6% of its earnings in the form of a dividend. ABB has raised its dividend for 5 consecutive years.

Earnings & Valuation

This table compares Pioneer Power Solutions and ABB’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pioneer Power Solutions $116.06 million 0.52 $6.57 million $0.02 342.50
ABB $33.56 billion 1.55 $4.26 billion $1.08 22.62

ABB has higher revenue and earnings than Pioneer Power Solutions. ABB 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

ABB beats Pioneer Power Solutions on 9 of the 17 factors compared between the two stocks.

About Pioneer Power Solutions

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.

About ABB

ABB Ltd (ABB) is a holding company. The Company’s segments include Electrification Products, Robotics and Motion, Industrial Automation, Power Grids, and Corporate and Other. It operates through four divisions: Electrification Products, Robotics and Motion, Industrial Automation and Power Grids. It is engaged in serving customers in utilities, industry and transport and infrastructure. The Electrification Products segment manufactures and sells products and services including low and medium-voltage switchgear, breakers, switches and control products. The Robotics and Motion segment manufactures and sells motors, generators, variable speed drives and robots and robotics. The Industrial Automation segment develops and sells control and plant optimization systems, and automation products and solutions. The Power Grids segment supplies power and automation products, systems, and service and software solutions.

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