Financial Review: Kone Oyj (OTCMKTS:KNYJY) & Powell Industries (NASDAQ:POWL)

Kone Oyj (OTCMKTS:KNYJY) and Powell Industries (NASDAQ:POWL) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Dividends

Kone Oyj pays an annual dividend of $0.42 per share and has a dividend yield of 1.3%. Powell Industries pays an annual dividend of $1.07 per share and has a dividend yield of 0.6%. Kone Oyj pays out 42.0% of its earnings in the form of a dividend. Powell Industries pays out 7.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Powell Industries has raised its dividend for 3 consecutive years.

Valuation & Earnings

This table compares Kone Oyj and Powell Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kone Oyj	$12.01 billion	2.42	$1.03 billion	$1.00	32.02
Powell Industries	$1.01 billion	2.16	$149.85 million	$14.23	12.71

Kone Oyj has higher revenue and earnings than Powell Industries. Powell Industries is trading at a lower price-to-earnings ratio than Kone Oyj, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Kone Oyj has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Powell Industries has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Insider and Institutional Ownership

89.8% of Powell Industries shares are held by institutional investors. 2.2% of Powell Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Kone Oyj and Powell Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kone Oyj	1	1	0	0	1.50
Powell Industries	0	0	1	1	3.50

Powell Industries has a consensus price target of $312.00, suggesting a potential upside of 72.48%. Given Powell Industries’ stronger consensus rating and higher possible upside, analysts plainly believe Powell Industries is more favorable than Kone Oyj.

Profitability

This table compares Kone Oyj and Powell Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kone Oyj	8.58%	36.24%	10.82%
Powell Industries	16.00%	35.43%	18.87%

Summary

Powell Industries beats Kone Oyj on 12 of the 18 factors compared between the two stocks.

About Kone Oyj

KONE Oyj, together with its subsidiaries, engages in the elevator and escalator business worldwide. The company provides elevators, escalators, and automatic building doors. It offers maintenance services; and modernization solutions. In addition, the company offers KONE Office Flow, a connected solution that allows for personalized user experiences and touch-free access; health and well-being solutions for elevators, escalators, and doors; KONE Access, an access control system, which is integrated with elevator system and building doors; KONE Destination, a destination control system that reduce waiting and travel times; KONE infotainment, a communication channel for building tenants and visitors; and monitoring solutions that enable real-time inspection of elevators and escalators. Further, it provides people flow planning and consulting services; solutions for special buildings and large projects; cybersecurity solutions; and energy solutions for greener buildings. KONE Oyj was founded in 1908 and is based in Espoo, Finland.

About Powell Industries

Powell Industries, Inc., together with its subsidiaries, designs, develops, manufactures, sells, and services custom-engineered equipment and systems. The company’s principal products include integrated power control room substations, custom-engineered modules, electrical houses, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers, switches, and bus duct systems, as well as traditional and arc-resistant distribution switchgears and control gears. Its products have application in voltages ranging from 480 volts to 38,000 volts. The company also provide field service inspection, installation, commissioning, modification and repair, spare parts, retrofit and retrofill components for existing systems, and replacement circuit breakers for switchgear. It serves onshore and offshore production, liquefied natural gas facilities and terminals, pipelines, refineries, and petrochemical plants, as well as electric utility, light rail traction power, mining and metals, pulp and paper, data centers and other municipal, commercial, and industrial markets. The company has operations in the United States, Canada, the Middle East, Africa, Europe, Mexico, and Central and South America. Powell Industries, Inc. was founded in 1947 and is headquartered in Houston, Texas.