Reviewing Generac (NYSE:GNRC) & Kawasaki Heavy Industries (OTCMKTS:KWHIY)

Kawasaki Heavy Industries (OTCMKTS:KWHIY) and Generac (NYSE:GNRC) are both large-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Risk & Volatility

Kawasaki Heavy Industries has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Generac has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.

Profitability

This table compares Kawasaki Heavy Industries and Generac’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kawasaki Heavy Industries	4.74%	13.65%	3.53%
Generac	3.79%	14.55%	6.96%

Institutional & Insider Ownership

84.0% of Generac shares are owned by institutional investors. 2.7% of Generac shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Kawasaki Heavy Industries and Generac”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kawasaki Heavy Industries	$13.98 billion	1.40	$580.81 million	$1.73	26.94
Generac	$4.35 billion	3.09	$159.55 million	$2.68	85.52

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Kawasaki Heavy Industries and Generac, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kawasaki Heavy Industries	0	1	0	1	3.00
Generac	0	5	13	1	2.79

Generac has a consensus target price of $220.19, indicating a potential downside of 3.93%. Given Generac’s higher possible upside, analysts plainly believe Generac is more favorable than Kawasaki Heavy Industries.

Summary

Generac beats Kawasaki Heavy Industries on 10 of the 14 factors compared between the two stocks.

About Kawasaki Heavy Industries

Kawasaki Heavy Industries, Ltd. engages in aerospace systems, energy solution and marine engineering, precision machinery and robot, rolling stock, and motorcycle and engine businesses in Japan and internationally. It manufactures aircraft for the Japan ministry of defense; helicopters; and helicopter and jet engines for commercial aircrafts. The company also manufactures railway cars; a range of rolling stocks, including Shinkansen, electric cars, passenger coaches, freight cars, locomotives, diesel locomotives, and transit systems. In addition, it engages in the production and sale of energy-related machinery and systems, marine machinery and systems, industrial equipment, and environmental equipment. Further, the company manufactures and supplies motorcycles, off-road four wheelers, watercrafts, general-purpose gasoline engines, etc. Additionally, it manufactures and sells pumps, motors, valves, and various hydraulic machinery, as well as assembles hydraulic systems; and industrial robots for use in welding, assembly, handling, painting, and palletization for various industries, including automotive and electronics industries. The company was founded in 1878 and is headquartered in Tokyo, Japan.

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.