American Superconductor (NASDAQ:AMSC – Get Free Report) and ABB (OTCMKTS:ABBNY – Get Free Report) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.
Institutional and Insider Ownership
52.3% of American Superconductor shares are held by institutional investors. Comparatively, 1.1% of ABB shares are held by institutional investors. 3.6% of American Superconductor shares are held by insiders. Comparatively, 4.9% of ABB shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares American Superconductor and ABB’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Superconductor | 44.73% | 32.19% | 24.14% |
| ABB | 13.86% | 31.25% | 11.17% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Superconductor | 0 | 2 | 1 | 1 | 2.75 |
| ABB | 1 | 10 | 1 | 1 | 2.15 |
ABB has a consensus target price of $58.00, indicating a potential downside of 41.49%. Given ABB’s higher probable upside, analysts clearly believe ABB is more favorable than American Superconductor.
Valuation and Earnings
This table compares American Superconductor and ABB”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Superconductor | $299.15 million | 5.02 | $133.81 million | $3.00 | 10.33 |
| ABB | $33.22 billion | 5.44 | $4.73 billion | $2.77 | 35.78 |
ABB has higher revenue and earnings than American Superconductor. American Superconductor is trading at a lower price-to-earnings ratio than ABB, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
American Superconductor has a beta of 3.27, indicating that its share price is 227% more volatile than the S&P 500. Comparatively, ABB has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.
Summary
American Superconductor beats ABB on 7 of the 13 factors compared between the two stocks.
About American Superconductor
American Superconductor Corporation, together with its subsidiaries, provides megawatt-scale power resiliency solutions worldwide. The company operates through Grid and Wind segments. The Grid segment offers products and services that enable electric utilities, industrial facilities, and renewable energy project developers to connect, transmit, and distribute power under the Gridtec Solutions brand. It provides transmission planning services, which identify power grid congestion, poor power quality, and other risks; grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems; D-VAR systems used for controlling power flow and voltage in the AC transmission system; actiVAR system, a fast-switching medium-voltage reactive compensation solution; armorVAR system installed for reactive compensation, power factor correction, loss reduction, utility bill savings, and mitigation of common power quality concerns related to power converter-based generation and load devices; and D-VAR volt var optimization (VVO) that serves the distribution power grid market. This segment also offers ship protection systems, which reduce a naval ship’s magnetic signature; and ON board power delivery systems, power generation systems, and propulsion systems; and transformers and rectifiers systems. The Wind segment designs wind turbine systems and licenses these designs to third parties under the Windtec Solutions brand. It also supplies power electronics and software-based control systems, engineered designs, and support services; and provides customer support services to wind turbine manufacturers. This segment’s design portfolio comprises a range of drivetrains and power ratings of 2 megawatts and higher. American Superconductor Corporation was incorporated in 1987 and is headquartered in Ayer, Massachusetts.
About ABB
ABB Ltd provides electrification, motion, and automation solutions and products for customers in utilities, industry and transport, and infrastructure in Switzerland, rest of Europe, the Americas, the United States, rest of Asia, the Middle East, Africa, China, and internationally. Its Electrification segment offers renewable power solutions, modular substation packages, distribution automation products, switchboards and panelboards, switchgears, UPS solutions, circuit breakers, measuring and sensing devices, control products, wiring accessories, enclosures and cabling systems, and intelligent home and building solutions. The company's Motion segment designs, manufactures, and sells drives, motors, generators, and traction converters that are driving the low-carbon future for industries, cities, infrastructure, and transportation. The company's Process Automation segment provides control technologies, industrial software, advanced analytics, sensing and measurement technology, and marine propulsion systems; and repair, remote monitoring, preventive maintenance, asset performance management, emission monitoring, and cybersecurity services. The company's Robotics & Discrete Automation segment offers industrial and collaborative robots, autonomous mobile robotics, mapping and navigation solutions, robotic solutions, field services, spare parts, and digital services. This segment also provides solutions based on its programmable logic controllers, industrial PCs, servo motion, transport systems, and machine vision. It serves oil, gas, chemicals, mining, metals, cement, pulp and paper, pharmaceuticals, battery manufacturing, food and beverage, power generation, water, marine, and ports industries. The company was founded in 1883 and is headquartered in Zurich, Switzerland.
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