Houston Wire & Cable (NASDAQ: HWCC) and Preformed Line Products (NASDAQ:PLPC) are both small-cap industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.
Insider & Institutional Ownership
66.0% of Houston Wire & Cable shares are owned by institutional investors. Comparatively, 45.3% of Preformed Line Products shares are owned by institutional investors. 4.0% of Houston Wire & Cable shares are owned by company insiders. Comparatively, 37.7% of Preformed Line Products shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Houston Wire & Cable has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Preformed Line Products has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.
Preformed Line Products pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Houston Wire & Cable does not pay a dividend. Preformed Line Products pays out 24.0% of its earnings in the form of a dividend.
This is a summary of recent ratings and target prices for Houston Wire & Cable and Preformed Line Products, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Houston Wire & Cable||0||0||1||0||3.00|
|Preformed Line Products||0||0||0||0||N/A|
Houston Wire & Cable currently has a consensus price target of $8.00, indicating a potential upside of 16.79%. Given Houston Wire & Cable’s higher possible upside, analysts clearly believe Houston Wire & Cable is more favorable than Preformed Line Products.
Valuation and Earnings
This table compares Houston Wire & Cable and Preformed Line Products’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Houston Wire & Cable||$261.64 million||0.43||-$6.00 million||($0.25)||-27.40|
|Preformed Line Products||$336.63 million||0.96||$15.25 million||$3.33||19.07|
Preformed Line Products has higher revenue and earnings than Houston Wire & Cable. Houston Wire & Cable is trading at a lower price-to-earnings ratio than Preformed Line Products, indicating that it is currently the more affordable of the two stocks.
This table compares Houston Wire & Cable and Preformed Line Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Houston Wire & Cable||-1.33%||-0.86%||-0.43%|
|Preformed Line Products||4.64%||7.30%||4.85%|
Preformed Line Products beats Houston Wire & Cable on 10 of the 15 factors compared between the two stocks.
Houston Wire & Cable Company Profile
Houston Wire & Cable Company is a holding company. The Company is engaged in provision of electrical and mechanical wire and cable, hardware and related services. It operates through sales of wire and cable, hardware and related services segment in the United States market. Its cable management program includes purchasing and storing inventory for product availability. The Company offers products in categories of wire and cable, including continuous and interlocked armor cable; control and power cable; electronic wire and cable; flexible and portable cord; instrumentation and thermocouple cable; lead and high temperature cable; medium voltage cable; premise and category wire and cable; primary and secondary aluminum distribution cable, and synthetic fiber rope slings, chain, shackles, and other related hardware. The Company also offers private branded products, including its brand LifeGuard, a low smoke zero halogen (LSZH) cable. Its products are used in repair and replacement work.
Preformed Line Products Company Profile
Preformed Line Products Company (PLPC) is a designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators and information industries. The Company’s products include Formed Wire and Related Hardware Products, Protective Closures, Plastic Products and Other Products. The Company operates through four segments: PLP-USA (including corporate), The Americas (includes operations in North and South America without PLP-USA), EMEA (Europe, Middle East and Africa) and Asia-Pacific. The Company’s PLP-USA segment consists of its United States operations manufacturing its traditional products primarily supporting its domestic energy, telecommunications and solar products. Its other three segments, The Americas, EMEA and Asia-Pacific, support its energy, telecommunications, data communication and solar products in each respective geographical region.
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