ITT (NYSE: ITT) and Power Solutions International (OTC:PSIX) are both multi-sector conglomerates companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitabiliy, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for ITT and Power Solutions International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ITT 0 1 7 0 2.88
Power Solutions International 0 3 1 0 2.25

ITT presently has a consensus price target of $46.67, indicating a potential upside of 12.10%. Power Solutions International has a consensus price target of $13.50, indicating a potential upside of 36.64%. Given Power Solutions International’s higher possible upside, analysts plainly believe Power Solutions International is more favorable than ITT.

Institutional and Insider Ownership

92.6% of ITT shares are held by institutional investors. Comparatively, 23.6% of Power Solutions International shares are held by institutional investors. 1.2% of ITT shares are held by insiders. Comparatively, 56.5% of Power Solutions International shares are held by 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.

Earnings & Valuation

This table compares ITT and Power Solutions International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ITT $2.42 billion 1.53 $369.00 million $2.17 19.18
Power Solutions International $365.12 million 0.29 $8.42 million N/A N/A

ITT has higher revenue and earnings than Power Solutions International.

Dividends

ITT pays an annual dividend of $0.51 per share and has a dividend yield of 1.2%. Power Solutions International does not pay a dividend. ITT pays out 23.5% of its earnings in the form of a dividend. Power Solutions International has increased its dividend for 4 consecutive years.

Volatility & Risk

ITT has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, Power Solutions International has a beta of 2.71, meaning that its stock price is 171% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
ITT 8.04% 14.65% 5.76%
Power Solutions International N/A N/A N/A

Summary

ITT beats Power Solutions International on 10 of the 15 factors compared between the two stocks.

About ITT

ITT Corporation (ITT) is a diversified manufacturer of engineered critical components and technology solutions for industrial markets. The Company’s product and service offerings are organized in four segments: Industrial Process, Motion Technologies, Interconnect Solutions and Control Technologies. Industrial Process manufactures engineered fluid process equipment, and is a provider of plant optimization, solutions and aftermarket services and parts. Motion Technologies manufactures brake components, shock absorbers and damping technologies for the automotive, truck and trailer, public bus and rail transportation markets. Interconnect Solutions manufactures and designs a range of engineered connector solutions that makes it possible to transfer signal and power between electronic devices. Control Technologies manufactures equipment, including actuation, valves, and noise and energy absorption components for the aerospace and defense, and industrial markets.

About Power Solutions International

Power Solutions International, Inc. is a producer and distributor of a range of low-emission power systems that run on non-diesel fuels, such as natural gas, propane and gasoline. The Company’s industrial power systems are used by original equipment manufacturers (OEMs) in a range of industries with a diversified set of applications, including stationary electricity generators, oil and gas equipment, forklifts, aerial work platforms, industrial sweepers, arbor equipment, agricultural and turf equipment, aircraft ground support equipment, construction and irrigation equipment, and other industrial equipment. The Company provides alternative fuel power systems for OEMs of off-highway industrial equipment and on-road medium trucks and busses. In addition to its emission-certified power systems, the Company produces and distributes non-emission-certified power systems for industrial OEMs for particular applications in markets without emission standards.

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