Critical Analysis: China Yuchai International (NYSE:CYD) versus Power Solutions International (NASDAQ:PSIX)

China Yuchai International (NYSE:CYD) and Power Solutions International (NASDAQ:PSIX) are both small-cap auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for China Yuchai International and Power Solutions International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Yuchai International	0	1	0	0	2.00
Power Solutions International	0	0	0	0	0.00

Volatility and Risk

China Yuchai International has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Power Solutions International has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Institutional and Insider Ownership

22.3% of Power Solutions International shares are held by institutional investors. 0.6% of Power Solutions International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares China Yuchai International and Power Solutions International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Yuchai International	$19.13 billion	0.00	$40.19 million	$1.62	11.68
Power Solutions International	$436.42 million	1.76	$26.31 million	$2.36	14.14

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

Profitability

This table compares China Yuchai International and Power Solutions International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Yuchai International	N/A	N/A	N/A
Power Solutions International	12.46%	293.35%	15.94%

Summary

Power Solutions International beats China Yuchai International on 9 of the 12 factors compared between the two stocks.

About China Yuchai International

China Yuchai International Limited, through its subsidiaries, manufactures, assembles, and sells diesel and natural gas engines for trucks, buses and passenger vehicles, marine, industrial, construction, agriculture, and generator set applications in the People’s Republic of China and internationally. It operates through two segments, Yuchai and HLGE. The Yuchai segment manufactures on- and off-road powertrain solutions and applications. The HLGE is engaged in hospitality and property development activities. The company provides diesel engines comprising 4- and 6-cylinder diesel engines, high horsepower marine diesel engines, and power generator engines; natural gas engines, methanol combustion engines, diesel power generators, diesel engine parts, and remanufacturing services; as well as plug in hybrid engines, range extenders, power generation powertrains, hybrid powertrains, integrated electric drive axel powertrains, and fuel cell systems. It also offers maintenance and retrofitting services. It distributes its engines directly to auto original equipment manufacturers, agents, and retailers. The company was founded in 1951 and is based in Singapore.

About Power Solutions International

Power Solutions International, Inc. engages in the design, manufacture, and trade of power systems and electrical power generation equipment. The firm provides integrated turnkey solutions to global original equipment manufacturers and end-user customers within the energy, industrial, and transportation end markets. The company was founded by Gary S. Winemaster, Kenneth J. Winemaster, and William Winemaster in February 1985 and is headquartered in Wood Dale, IL.