Hydrogenics Corporation (NASDAQ: HYGS) and Pioneer Power Solutions (NASDAQ:PPSI) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their profitabiliy, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Hydrogenics Corporation -29.14% -81.72% -18.61%
Pioneer Power Solutions -0.87% 17.48% 6.00%

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hydrogenics Corporation $33.50 million 3.26 -$7.32 million ($0.78) -11.15
Pioneer Power Solutions $115.09 million 0.46 $6.57 million ($0.11) -55.45

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

Volatility and Risk

Hydrogenics Corporation has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Pioneer Power Solutions has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Hydrogenics Corporation and Pioneer Power Solutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hydrogenics Corporation 0 1 2 0 2.67
Pioneer Power Solutions 0 0 1 0 3.00

Hydrogenics Corporation presently has a consensus price target of $10.00, suggesting a potential upside of 14.94%. Pioneer Power Solutions has a consensus price target of $8.00, suggesting a potential upside of 31.15%. Given Pioneer Power Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe Pioneer Power Solutions is more favorable than Hydrogenics Corporation.

Institutional and Insider Ownership

21.4% of Hydrogenics Corporation shares are held by institutional investors. Comparatively, 18.8% of Pioneer Power Solutions shares are held by institutional investors. 26.1% of Hydrogenics Corporation shares are held by insiders. Comparatively, 54.7% of Pioneer Power Solutions shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Pioneer Power Solutions beats Hydrogenics Corporation on 10 of the 13 factors compared between the two stocks.

About Hydrogenics Corporation

Hydrogenics Corp is a Canada-based firm, which designs and manufactures hydrogen generation products based on water electrolysis technology, and fuel cell products based on proton exchange membrane (PEM) technology. The Company’s segments are Onsite Generation and Power Systems. The OnSite Generation segment is based in Oevel, Belgium and develops products for industrial gas, hydrogen fueling and renewable energy storage markets. The Power business segment is based in Mississauga, Canada, with a satellite facility in Gladbeck, Germany. The Company’s products include HySTAT hydrogen generation equipment and HyPM fuel cell products. It has facilities in Mississauga, Ontario, Canada; Oevel-Westerlo, Belgium, and Gladbeck, Germany. It also has sales and service offices in Eastern Europe and North America. The Company has operations in Belgium, Canada and Germany with satellite offices in the United States and branch offices in Russia and Indonesia. Its products are sold around the world.

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.

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