Critical Analysis: Hillman Solutions (NASDAQ:HLMN) and Twin Disc (NASDAQ:TWIN)

Hillman Solutions (NASDAQ:HLMN) and Twin Disc (NASDAQ:TWIN) are both small-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Insider and Institutional Ownership

98.1% of Hillman Solutions shares are held by institutional investors. Comparatively, 65.2% of Twin Disc shares are held by institutional investors. 5.3% of Hillman Solutions shares are held by company insiders. Comparatively, 21.1% of Twin Disc shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Hillman Solutions and Twin Disc, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hillman Solutions	0	3	2	1	2.67
Twin Disc	0	1	2	0	2.67

Hillman Solutions currently has a consensus target price of $12.00, indicating a potential upside of 52.48%. Twin Disc has a consensus target price of $30.00, indicating a potential upside of 24.43%. Given Hillman Solutions’ higher possible upside, research analysts clearly believe Hillman Solutions is more favorable than Twin Disc.

Volatility and Risk

Hillman Solutions has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, Twin Disc has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Valuation and Earnings

This table compares Hillman Solutions and Twin Disc”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hillman Solutions	$1.55 billion	0.98	$40.31 million	$0.13	60.54
Twin Disc	$381.27 million	0.92	$27.08 million	$2.66	9.06

Hillman Solutions has higher revenue and earnings than Twin Disc. Twin Disc is trading at a lower price-to-earnings ratio than Hillman Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hillman Solutions and Twin Disc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hillman Solutions	1.48%	9.03%	4.53%
Twin Disc	9.87%	8.24%	4.23%

Summary

Hillman Solutions beats Twin Disc on 10 of the 13 factors compared between the two stocks.

About Hillman Solutions

Hillman Solutions Corp. supplies hardware products and merchandising services to retailers and other customers across North America. Its products include fasteners such as screws, nuts and bolts; keys and key-duplication systems; and builder’s hardware and other home-improvement and maintenance products. The company serves customers including hardware stores, home-improvement retailers and mass merchants. Alongside its products, Hillman provides in-store merchandising, inventory-management and related services to help customers stock and sell hardware goods.

About Twin Disc

Twin Disc, Inc. designs, manufactures and sells power transmission equipment for marine and industrial applications. Its products include marine transmissions, propulsion systems, propellers, surface drives and controls, as well as industrial transmissions, power take-offs and related equipment. The company’s products serve markets that include commercial and recreational marine, construction, agriculture, mining and other industries that use heavy-duty equipment. Twin Disc sells its products through a global network of subsidiaries, distributors and dealers.