Financial Analysis: Hollysys Automation Technologies (HOLI) versus Ideal Power (IPWR)

Hollysys Automation Technologies (NASDAQ: HOLI) and Ideal Power (NASDAQ:IPWR) are both small-cap industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Insider and Institutional Ownership

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68.3% of Hollysys Automation Technologies shares are held by institutional investors. Comparatively, 12.5% of Ideal Power shares are held by institutional investors. 10.0% of Ideal Power shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Hollysys Automation Technologies and Ideal Power, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hollysys Automation Technologies 1 1 1 0 2.00
Ideal Power 0 2 2 0 2.50

Hollysys Automation Technologies presently has a consensus price target of $20.77, indicating a potential downside of 10.05%. Ideal Power has a consensus price target of $3.38, indicating a potential upside of 175.15%. Given Ideal Power’s stronger consensus rating and higher possible upside, analysts clearly believe Ideal Power is more favorable than Hollysys Automation Technologies.

Valuation & Earnings

This table compares Hollysys Automation Technologies and Ideal Power’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hollysys Automation Technologies $431.94 million 3.23 $68.94 million $1.16 19.91
Ideal Power $1.21 million 14.19 -$10.43 million ($0.78) -1.57

Hollysys Automation Technologies has higher revenue and earnings than Ideal Power. Ideal Power is trading at a lower price-to-earnings ratio than Hollysys Automation Technologies, indicating that it is currently the more affordable of the two stocks.

Dividends

Hollysys Automation Technologies pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Ideal Power does not pay a dividend. Hollysys Automation Technologies pays out 10.3% of its earnings in the form of a dividend.

Volatility & Risk

Hollysys Automation Technologies has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500. Comparatively, Ideal Power has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Profitability

This table compares Hollysys Automation Technologies and Ideal Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hollysys Automation Technologies 18.89% 12.72% 8.71%
Ideal Power -852.02% -71.09% -62.90%

Summary

Hollysys Automation Technologies beats Ideal Power on 10 of the 16 factors compared between the two stocks.

Hollysys Automation Technologies Company Profile

Hollysys Automation Technologies Ltd. is a provider of automation and control technologies, and products. The Company’s segments include Industrial Automation (IA), Rail Transportation (rail), Mechanical and Electrical (M&E), and Miscellaneous. Its technologies are applied through its industrial automation solution suite, including the Distributed Control Systems, Programmable Logic Controller, Real-time Management Information System, HolliAS Asset Management System, Operator Training System, Batch Application Package, Advanced Process Control Package (HolliAS APC Suite), Safety Instrumentation System (SIS), railway signaling system of Train Control Center, Automatic Train Protection, Subway Supervisory and Control platform, nuclear power non-safety automation and control system HolliAs-NMS DCS and other products. It serves customers in the industrial, railway, subway, nuclear power, and mechanical and electronic industries in China, Southeast Asia, India, Europe and the Middle East.

Ideal Power Company Profile

Ideal Power Inc. develops power conversion solutions with a focus on commercial and industrial grid storage, combined solar and storage, and microgrid applications. The company offers 30kW battery converters for the commercial and industrial grid-tied distributed energy storage market; 30kW grid-resilient alternating current (AC) – direct current (DC) power conversion system (PCS) with two-ports, as well as 30kW grid-resilient AC-DC-DC multi-port model; and 125kW grid-resilient AC-DC PCS. It also focuses on licensing its proprietary power conversion Power Packet Switching Architecture to original equipment manufacturers. The company sells its products primarily to systems integrators directly, as well as through distribution channel partners in the United States. The company was formerly known as Ideal Power Converters Inc. and changed its name to Ideal Power Inc. in July 2013. Ideal Power Inc. was founded in 2007 and is headquartered in Austin, Texas.

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