Head to Head Analysis: Power Solutions International (NASDAQ:PSIX) vs. TPI Composites (NASDAQ:TPIC)

Power Solutions International (NASDAQ:PSIX) and TPI Composites (NASDAQ:TPIC) are both small-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Power Solutions International and TPI Composites, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Power Solutions International	0	0	0	0	0.00
TPI Composites	1	4	1	1	2.29

TPI Composites has a consensus price target of $4.58, suggesting a potential upside of 246.59%. Given TPI Composites’ stronger consensus rating and higher probable upside, analysts plainly believe TPI Composites is more favorable than Power Solutions International.

Earnings and Valuation

This table compares Power Solutions International and TPI Composites”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Power Solutions International	$458.97 million	2.08	$26.31 million	$2.36	17.56
TPI Composites	$1.46 billion	0.04	-$201.78 million	($3.75)	-0.35

Power Solutions International has higher earnings, but lower revenue than TPI Composites. TPI Composites is trading at a lower price-to-earnings ratio than Power Solutions International, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Power Solutions International has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, TPI Composites has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500.

Institutional & Insider Ownership

22.3% of Power Solutions International shares are owned by institutional investors. Comparatively, 75.2% of TPI Composites shares are owned by institutional investors. 0.6% of Power Solutions International shares are owned by insiders. Comparatively, 3.7% of TPI Composites shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Power Solutions International	12.46%	293.35%	15.94%
TPI Composites	-13.03%	N/A	-16.92%

Summary

TPI Composites beats Power Solutions International on 8 of the 15 factors compared between the two stocks.

About Power Solutions International

Power Solutions International, Inc. engages in the design, manufacture, and trade of power systems and electrical power generation equipment. The firm provides integrated turnkey solutions to global original equipment manufacturers and end-user customers within the energy, industrial, and transportation end markets. The company was founded by Gary S. Winemaster, Kenneth J. Winemaster, and William Winemaster in February 1985 and is headquartered in Wood Dale, IL.

About TPI Composites

TPI Composites, Inc. manufactures and sells composite wind blades, and related precision molding and assembly systems to original equipment manufacturers (OEMs) in the United States, Mexico, Europe, the Middle East, Africa, and India. It also provides composite solutions for the automotive industry; and field service inspection and repair services comprising diagnostic, repair, and maintenance services for wind blades to OEM customers, and wind farm owners and operators. The company was formerly known as LCSI Holding, Inc. and changed its name to TPI Composites, Inc. in 2008. TPI Composites, Inc. was founded in 1968 and is headquartered in Scottsdale, Arizona.