Head-To-Head Analysis: Franklin Electric (FELE) versus American Superconductor (AMSC)

Franklin Electric (NASDAQ: FELE) and American Superconductor (NASDAQ:AMSC) are both small-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Dividends

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Franklin Electric pays an annual dividend of $0.43 per share and has a dividend yield of 1.0%. American Superconductor does not pay a dividend. Franklin Electric pays out 22.4% of its earnings in the form of a dividend. Franklin Electric has increased its dividend for 8 consecutive years.

Profitability

This table compares Franklin Electric and American Superconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franklin Electric 6.95% 12.97% 7.65%
American Superconductor -65.96% -60.92% -36.59%

Risk & Volatility

Franklin Electric has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, American Superconductor has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Franklin Electric and American Superconductor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franklin Electric 0 3 1 0 2.25
American Superconductor 0 2 5 0 2.71

Franklin Electric currently has a consensus target price of $47.33, indicating a potential upside of 8.81%. American Superconductor has a consensus target price of $7.14, indicating a potential upside of 16.14%. Given American Superconductor’s stronger consensus rating and higher possible upside, analysts plainly believe American Superconductor is more favorable than Franklin Electric.

Earnings & Valuation

This table compares Franklin Electric and American Superconductor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Franklin Electric $1.12 billion 1.80 $78.18 million $1.92 22.66
American Superconductor $75.19 million 1.71 -$27.37 million ($2.16) -2.85

Franklin Electric has higher revenue and earnings than American Superconductor. American Superconductor is trading at a lower price-to-earnings ratio than Franklin Electric, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

78.0% of Franklin Electric shares are held by institutional investors. Comparatively, 25.4% of American Superconductor shares are held by institutional investors. 2.5% of Franklin Electric shares are held by insiders. Comparatively, 2.6% of American Superconductor shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Franklin Electric beats American Superconductor on 11 of the 16 factors compared between the two stocks.

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates in three segments: Water Systems, Fueling Systems, and Distribution. The Water Systems segment offers submersible motors, pumps, drives, electronic controls, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, and industrial applications; and electronic drives and controls are used in motors for controlling functionality, as well as providing protection from various hazards, such as electric surges, over-heating, and dry wells and tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in submersible fueling system applications. Its fuel pumping systems are used principally in total system solutions for underground gasoline, diesel, and biofuel systems. This segment serves other energy markets, such as power reliability systems, as well as includes intelligent electronic devices for online monitoring of the power utility, hydroelectric, and industrial markets. The Distribution segment sells to and provides pre-sale support and specifications to the installing contractors. It sells products produced by the Water Systems segment and other brands. The company sells its products to specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.

About American Superconductor

American Superconductor Corporation (AMSC) is a provider of megawatt-scale solutions. The Company operates through two segments: Wind and Grid. Through the Company’s Windtec Solutions brand, the Wind business segment enables manufacturers to field wind turbines. Through the Company’s Gridtec Solutions, the Grid business segment enables electric utilities and renewable energy project developers to connect, transmit and distribute power. AMSC supplies power electronics and control systems, licenses its engineered wind turbine designs and provides customer support services to wind turbine manufacturers. The Company provides a range of power electronics and software-based control systems. AMSC provides transmission planning services that enable it to identify power grid congestion and other risks. The Company also sells grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems.

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