Head to Head Survey: Generac (NYSE:GNRC) and Twin Disc (NASDAQ:TWIN)

Generac (NYSE:GNRC) and Twin Disc (NASDAQ:TWIN) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

Generac has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500. Comparatively, Twin Disc has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Institutional & Insider Ownership

84.0% of Generac shares are owned by institutional investors. Comparatively, 65.3% of Twin Disc shares are owned by institutional investors. 2.7% of Generac shares are owned by insiders. Comparatively, 22.1% of Twin Disc shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Generac and Twin Disc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Generac	7.91%	19.14%	9.19%
Twin Disc	-0.56%	-1.22%	-0.57%

Analyst Ratings

This is a summary of current recommendations and price targets for Generac and Twin Disc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Generac	1	7	12	0	2.55
Twin Disc	1	0	1	0	2.00

Generac presently has a consensus target price of $185.47, suggesting a potential downside of 3.76%. Twin Disc has a consensus target price of $12.00, suggesting a potential downside of 22.68%. Given Generac’s stronger consensus rating and higher probable upside, analysts plainly believe Generac is more favorable than Twin Disc.

Valuation & Earnings

This table compares Generac and Twin Disc”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Generac	$4.41 billion	2.56	$325.26 million	$6.02	32.01
Twin Disc	$340.74 million	0.66	-$1.89 million	($0.14)	-110.86

Generac has higher revenue and earnings than Twin Disc. Twin Disc is trading at a lower price-to-earnings ratio than Generac, indicating that it is currently the more affordable of the two stocks.

Summary

Generac beats Twin Disc on 13 of the 14 factors compared between the two stocks.

About Generac

Generac Holdings Inc. designs, manufactures, and distributes various energy technology products and solution worldwide. The company offers residential automatic standby generators, automatic transfer switch, air-cooled engine residential standby generators, and liquid-cooled engine generators; Mobile Link, a remote monitoring system for home standby generators; residential storage solution, which consists of a system of batteries, an inverter, photovoltaic optimizers, power electronic controls, and other components; smart home solutions, such as smart thermostats and a suite of home monitoring products. It also provides smart home energy management devices and sensors for heating and cooling system; smart doorbell cameras; and portable and inverter generators; multiple portable battery solutions; manual transfer switches; outdoor power equipment, including trimmers, field and brush mowers, log splitters, stump grinders, chipper shredders, lawn and leaf vacuums, and pressure washers and water pumps; and battery-powered turf care products. In addition, the company offers commercial and industrial products comprising cleaner-burning natural gas fueled generators; light-commercial standby generators and related transfer switches; stationary generators; single-engine industrial generators; industrial standby generators; industrial transfer switches; light towers, mobile generators, commercial mobile pumps, heaters, dust-suppression equipment, and mobile energy storage systems; stationary energy storage system and related inverter products; and aftermarket service parts and product accessories. The company distributes its products through independent residential dealers, industrial distributors and dealers, national and regional retailers, e-commerce partners, electrical/HVAC/solar wholesalers, solar installers, catalogs, equipment rental companies, and other equipment distributors; and directly to end users. The company was founded in 1959 and is headquartered in Waukesha, Wisconsin.

About Twin Disc

Twin Disc, Incorporated engages in the design, manufacture, and sale of marine and heavy duty off-highway power transmission equipment in the United States, the Netherlands, China, Australia, Italy, and internationally. The company operates in two segments, Manufacturing and Distribution. Its principal products include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. The company also provides third-party manufactured products. It sells its products through a direct sales force and distributor network to customers primarily in the pleasure craft, commercial marine, patrol, and military marine markets, as well as in the energy and natural resources, government, agriculture, recycling, construction, oil and gas, and industrial markets. The company was incorporated in 1918 and is headquartered in Milwaukee, Wisconsin.