Critical Survey: Woodward (NASDAQ:WWD) versus FuelCell Energy (NASDAQ:FCEL)

Woodward (NASDAQ:WWD) and FuelCell Energy (NASDAQ:FCEL) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Volatility & Risk

Woodward has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500. Comparatively, FuelCell Energy has a beta of 5.03, suggesting that its share price is 403% more volatile than the S&P 500.

Institutional and Insider Ownership

79.1% of Woodward shares are owned by institutional investors. Comparatively, 34.0% of FuelCell Energy shares are owned by institutional investors. 3.8% of Woodward shares are owned by insiders. Comparatively, 0.1% of FuelCell Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Woodward and FuelCell Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Woodward 1 5 1 0 2.00
FuelCell Energy 3 5 0 0 1.63

Woodward presently has a consensus target price of $114.57, suggesting a potential downside of 6.81%. FuelCell Energy has a consensus target price of $7.70, suggesting a potential downside of 26.46%. Given Woodward’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Woodward is more favorable than FuelCell Energy.

Profitability

This table compares Woodward and FuelCell Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Woodward 9.46% 9.32% 4.78%
FuelCell Energy -136.60% -39.99% -14.00%

Valuation and Earnings

This table compares Woodward and FuelCell Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Woodward $2.50 billion 3.13 $240.40 million $3.96 31.03
FuelCell Energy $70.87 million 47.50 -$89.11 million ($0.24) -43.50

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

Summary

Woodward beats FuelCell Energy on 12 of the 14 factors compared between the two stocks.

Woodward Company Profile

Woodward, Inc. designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide. The company operates in two segments, Aerospace and Industrial. The Aerospace segment offers fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles; and flight deck controls, actuators, servo controls, and motors and sensors for aircraft that are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems. It also provides aftermarket maintenance, repair and overhaul, and other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users. This segment sells its products to original equipment manufacturers (OEMs), tier-one suppliers, and various contractors, as well as through aftermarket sales of components, such as provisioning spares or replacements, and spare parts. The Industrial segment designs, produces, and services systems and products for the management of fuel, air, fluids, gases, motion, combustion, and electricity. Its products include actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, power converters, sensors, and other devices that measure, communicate, and protect electrical distribution systems for use in industrial gas turbines, steam turbines, reciprocating engines, electric power generation and power distribution systems, wind turbines, and compressors. This segment sells its aftermarket products, and other related services to OEMs through an independent network of distributors, as well as directly to end users. The company was founded in 1870 and is headquartered in Fort Collins, Colorado.

FuelCell Energy Company Profile

FuelCell Energy, Inc., together with its subsidiaries, designs, manufactures, sells, installs, operates, and services stationary fuel cell power plants for distributed baseload power generation. The company offers SureSource product line based on carbonate fuel cell technology in various configurations, including on-site power, utility grid support, distributed hydrogen, and carbon utilization, as well as micro-grid and multi-megawatt applications; and SureSource Recovery power plants for natural gas pipeline applications. It also provides SureSource Capture system that separates and concentrates carbon dioxide from the flue gases of natural gas, biomass, or coal-fired power plants, as well as industrial facilities; and SOFC/SOEC and Energy Storage, a solution for energy storage using solid oxide technology. The company's SureSource power plants generate clean electricity, usable heat, water, and hydrogen. It serves various markets, such as utilities and independent power producers, industrial and process applications, education and health care, data centers and communication, wastewater treatment, government, morcrogrids, and commercial and hospitality. The company primarily operates in the United States, South Korea, England, Germany, and Switzerland. FuelCell Energy, Inc. was founded in 1969 and is headquartered in Danbury, Connecticut.

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