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Hammond Power Solutions Inc. Class A Subordinate Voting Shares (HPS.A)
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Powell Industries Inc. (POWL)
Q: Can you compare POW and HPS-A against each other and identify which would have more share price potential? How would they compare to something larger like FTS?
5i Research Answer:
POWL is 16X earnings, $980M market cap, 1,3% dividend, and has $279M cash. EPS surged in 2023 (tripling) but very little growth is now expected in the next two years. HPS.A is now $1.1B, 18X earnings, 0.67% dividend, $10M net cash. Like POWL growth surged starting in 2022, and is now levelling off somewhat, but earnings growth is still expected to be quite higher than POWL. There is some overlap here, but they do have differing customers, but much of the same industry influences. We would not compare these to a utility such as FTS, which is massively larger, slower growth, but more stable cash flow.