Head-To-Head Review: Eaton (NYSE:ETN) versus Orion Energy Systems (NASDAQ:OESX)

Orion Energy Systems (NASDAQ:OESX) and Eaton (NYSE:ETN) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Insider and Institutional Ownership

52.6% of Orion Energy Systems shares are owned by institutional investors. Comparatively, 83.0% of Eaton shares are owned by institutional investors. 5.3% of Orion Energy Systems shares are owned by insiders. Comparatively, 0.1% of Eaton shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orion Energy Systems	-0.20%	10.66%	3.28%
Eaton	12.18%	25.09%	9.62%

Earnings and Valuation

This table compares Orion Energy Systems and Eaton”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion Energy Systems	$86.31 million	0.64	-$3.16 million	($0.08)	-168.88
Eaton	$31.98 billion	4.38	$4.09 billion	$10.01	36.06

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

Risk & Volatility

Orion Energy Systems has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Eaton has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Orion Energy Systems and Eaton, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion Energy Systems	0	2	2	0	2.50
Eaton	0	2	20	1	2.96

Orion Energy Systems currently has a consensus price target of $36.50, suggesting a potential upside of 170.17%. Eaton has a consensus price target of $482.09, suggesting a potential upside of 33.56%. Given Orion Energy Systems’ higher probable upside, research analysts plainly believe Orion Energy Systems is more favorable than Eaton.

Summary

Eaton beats Orion Energy Systems on 13 of the 15 factors compared between the two stocks.

About Orion Energy Systems

Orion Energy Systems, Inc., together with its subsidiaries, researches, designs, develops, manufactures, markets, sells, installs, and implements energy management systems for commercial office and retail, area lighting, industrial applications, and government in North America and Germany. It operates in three segments: Lighting, Maintenance, and Electric Vehicle (EV). The company offers light emitting diode (LED) lighting products; construction and engineering services for commercial lighting and energy management system; lighting and electrical system maintenance, repair, and replacement services; and EV charging station and installation solutions. It also provides LED high bay fixtures and LED troffer retrofits; smart lighting controls, a wireless Internet of Things enabled control solution that provides lighting control options and data intelligence capabilities for building managers; and various LED fixtures for lighting and energy management needs comprising fixtures for agribusinesses, parking lots, roadways, retail, mezzanine, outdoor applications, and private label resale. In addition, the company offers lighting-related energy management services, such as site assessment, site field verification, utility incentive and government subsidy management, engineering design, project management, facility design commissioning, and recycling. It serves customers directly and through independent sales agencies and distributors, national account end-users, federal and state government facilities, regional account end-users, electrical distributors, electrical contractors, and energy service companies. Orion Energy Systems, Inc. was incorporated in 1996 and is headquartered in Manitowoc, Wisconsin.

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.