Head to Head Survey: Eaton (NYSE:ETN) and FuelCell Energy (NASDAQ:FCEL)

FuelCell Energy (NASDAQ:FCEL) and Eaton (NYSE:ETN) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Risk and Volatility

FuelCell Energy has a beta of 2.46, meaning that its share price is 146% more volatile than the S&P 500. Comparatively, Eaton has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Valuation and Earnings

This table compares FuelCell Energy and Eaton”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FuelCell Energy	$154.14 million	5.45	-$187.90 million	($3.43)	-3.06
Eaton	$30.03 billion	4.72	$4.09 billion	$9.83	37.15

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

Institutional and Insider Ownership

42.8% of FuelCell Energy shares are owned by institutional investors. Comparatively, 83.0% of Eaton shares are owned by institutional investors. 5.5% of FuelCell Energy shares are owned by insiders. Comparatively, 0.1% of Eaton shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for FuelCell Energy and Eaton, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FuelCell Energy	2	5	6	0	2.31
Eaton	0	2	20	1	2.96

FuelCell Energy currently has a consensus target price of $21.80, indicating a potential upside of 107.62%. Eaton has a consensus target price of $484.10, indicating a potential upside of 32.56%. Given FuelCell Energy’s higher probable upside, research analysts plainly believe FuelCell Energy is more favorable than Eaton.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FuelCell Energy	-113.60%	-16.85%	-12.31%
Eaton	12.75%	24.58%	9.98%

Summary

Eaton beats FuelCell Energy on 11 of the 15 factors compared between the two stocks.

About FuelCell Energy

FuelCell Energy, Inc., together with its subsidiaries, manufactures and sells stationary fuel cell and electrolysis platforms that decarbonize power and produce hydrogen. The company provides various configurations and applications of its platform, including on-site power, utility grid support, and microgrid, as well as distributed hydrogen; solid oxide-based electrolysis; solutions for long duration hydrogen-based energy storage and electrolysis technology; and carbon capture, separation, and utilization systems. It also offers technology to produce electricity, heat, hydrogen, and water. In addition, the company provides turn-key solutions, including development, engineering, procurement, construction, interconnection, and operation services. It serves various markets, including utilities and independent power producers, industrial and process applications, education and health care, data centers and communication, wastewater treatment, government, commercial and hospitality, microgrids, manufacturing, industrial hydrogen, port, oil and gas, wind and solar projects, food and beverage, hydrogen for mobility and material handling, and hydrogen fuel for heat, as well as engineering, procurement, and construction firms. The company primarily operates in the United States, South Korea, and Europe. FuelCell Energy, Inc. was founded in 1969 and is headquartered in Danbury, Connecticut.

About Eaton

Eaton Corporation plc operates as a power management company worldwide. The company’s Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems. Its Aerospace segment offers pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, and adapters and regulators; oxygen generation system, payload carriages, and thermal management products; and wiring connectors and cables, as well as hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, and related after-market customers, as well as industrial applications. The company’s Vehicle segment offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry. Its eMobility segment provides voltage inverters, converters, fuses, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. Eaton Corporation plc was founded in 1911 and is based in Dublin, Ireland.