Home > Comparison > Industrials > HWM vs GNRC
The strategic rivalry between Howmet Aerospace Inc. and Generac Holdings Inc. defines the current trajectory of the industrial machinery sector. Howmet Aerospace operates as a capital-intensive aerospace components manufacturer with a global footprint. In contrast, Generac focuses on high-margin power generation and energy storage solutions targeting residential and commercial markets. This analysis aims to determine which company’s operational model offers superior risk-adjusted returns for a diversified portfolio.
Table of contents
Companies Overview
Howmet Aerospace and Generac Holdings both shape critical segments of the industrial machinery market with distinct competitive edges.
Howmet Aerospace Inc.: Advanced Engineered Solutions Leader
Howmet Aerospace dominates aerospace and transportation markets with engineered components like airfoils, forgings, and fastening systems. Its revenue streams span four segments, including Engine Products and Forged Wheels. In 2026, the company focuses on expanding its global footprint and innovating lightweight materials to maintain its leadership in aerospace manufacturing.
Generac Holdings Inc.: Power Generation Innovator
Generac Holdings commands the power equipment sector by designing and selling power generation and energy storage systems for residential and commercial users. Its product range includes standby generators and portable power solutions. In 2026, Generac prioritizes integrating clean energy technologies and expanding smart monitoring to capture market share in energy resilience and sustainability.
Strategic Collision: Similarities & Divergences
Both companies operate in industrial machinery but diverge sharply in core business models—Howmet emphasizes aerospace precision manufacturing, while Generac targets power solutions and energy independence. Their competitive battleground centers on innovation-driven growth, with Howmet focusing on aerospace materials and Generac on clean energy. Investors will find distinct risk-return profiles shaped by aerospace cyclicality versus energy sector volatility.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Howmet Aerospace Inc. (HWM) | Generac Holdings Inc. (GNRC) |
|---|---|---|
| Revenue | 8.25B | 4.21B |
| Cost of Revenue | 5.72B | 2.60B |
| Operating Expenses | 407M | 1.32B |
| Gross Profit | 2.54B | 1.61B |
| EBITDA | 2.41B | 289M |
| EBIT | 2.13B | 0 |
| Interest Expense | 151M | -71M |
| Net Income | 1.51B | 160M |
| EPS | 3.73 | 2.73 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
The income statement comparison reveals each company’s true operational efficiency and how well they convert sales into profits.
Howmet Aerospace Inc. Analysis
Howmet Aerospace’s revenue soared from 5.0B in 2021 to 8.3B in 2025, while net income surged nearly sixfold to 1.5B. Gross and net margins improved steadily, reaching 30.7% and 18.3%, respectively, in 2025. The company demonstrates strong momentum with 11% revenue growth and a 32% jump in EPS in the latest year, signaling robust operational leverage.
Generac Holdings Inc. Analysis
Generac’s revenue peaked at 4.6B in 2022 but declined to 4.2B by 2025. Net income dropped sharply from 533M in 2021 to 160M in 2025. Despite a high gross margin of 38.3%, the net margin shrank to a weak 3.8% in 2025. The company faced declining profitability with a 2% revenue dip and a 50% EPS fall last year, reflecting margin pressure and operational challenges.
Growth and Margin Dominance: Howmet’s Efficiency vs. Generac’s Struggles
Howmet Aerospace clearly outperforms Generac, showing superior revenue growth, expanding margins, and strong bottom-line gains. Generac’s shrinking net income and margin erosion mark fundamental weaknesses. For investors prioritizing sustained profit growth and operational efficiency, Howmet’s profile offers a more compelling and resilient earnings trajectory.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose underlying fiscal health, valuation premiums, and capital efficiency for a clear side-by-side view:
| Ratios | Howmet Aerospace Inc. (HWM) | Generac Holdings Inc. (GNRC) |
|---|---|---|
| ROE | 28.17% | 0% |
| ROIC | 18.19% | 0% |
| P/E | 54.93 | 50.02 |
| P/B | 15.47 | 0 |
| Current Ratio | 2.13 | 0 |
| Quick Ratio | 1.09 | 0 |
| D/E | 0.57 | 0 |
| Debt-to-Assets | 27.28% | 0% |
| Interest Coverage | 14.11 | -4.09 |
| Asset Turnover | 0.74 | 0 |
| Fixed Asset Turnover | 3.18 | 0 |
| Payout ratio | 12.00% | 0.18% |
| Dividend yield | 0.22% | 0.00% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, uncovering hidden risks and operational strengths crucial for assessing investment potential.
Howmet Aerospace Inc.
Howmet Aerospace exhibits strong profitability with a 28.17% ROE and an 18.27% net margin, signaling operational efficiency. Its P/E ratio of 54.93 suggests a stretched valuation relative to earnings. Shareholder returns lean on minimal dividends (0.22% yield), indicating a focus on reinvestment for growth and innovation.
Generac Holdings Inc.
Generac shows weak profitability metrics, with a 3.79% net margin and zero ROE, reflecting operational challenges. The P/E ratio stands at 50.02, signaling an expensive stock despite low returns. The absence of dividends and lack of robust financial ratios point to potential risks and underperformance.
Premium Valuation vs. Operational Safety
Howmet Aerospace balances high profitability with a premium valuation, offering superior operational metrics and modest shareholder returns. Generac’s ratios reveal stretched valuation with weak profitability, increasing risk. Investors prioritizing operational safety and growth may prefer Howmet’s profile, while risk-tolerant investors might weigh Generac’s uncertainties.
Which one offers the Superior Shareholder Reward?
I see Howmet Aerospace Inc. (HWM) offers a modest 0.22% dividend yield with a conservative 12% payout ratio, supported by strong free cash flow of 3.54/share and active buybacks enhancing returns. Generac Holdings Inc. (GNRC) barely pays dividends (0.004%) but aggressively reinvests FCF (7.48/share) into growth. HWM’s balanced approach blends income and buybacks sustainably. GNRC’s growth reinvestment is riskier but could yield more if margins improve. In 2026, I find HWM’s shareholder reward more attractive for steady total return with lower capital risk.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Howmet Aerospace Inc. and Generac Holdings Inc., highlighting their core financial strengths and vulnerabilities:
Howmet Aerospace shows leadership in profitability with top ROE and ROA scores of 5 each, but struggles in valuation and leverage metrics, scoring 1 and 2 respectively. Generac holds a moderate edge in discounted cash flow with a score of 3 but lags in returns and valuation. Howmet presents a more unbalanced profile, relying heavily on operational efficiency, while Generac offers a slightly more diversified but weaker overall score.
Bankruptcy Risk: Solvency Showdown
Howmet’s Altman Z-Score of 12.4 versus Generac’s 4.5 signals both are in the safe zone, but Howmet’s score implies far stronger resilience against financial distress in the current economic cycle:
Financial Health: Quality of Operations
Howmet leads with a Piotroski F-Score of 8, indicating very strong financial health and robust internal metrics. Generac’s score of 6 suggests average financial strength with potential red flags in operational efficiency or liquidity:
How are the two companies positioned?
This section dissects the operational DNA of Howmet Aerospace (HWM) and Generac Holdings (GNRC) by comparing their revenue distribution and internal strengths and weaknesses. The goal is to confront their economic moats to identify which business model offers the most resilient and sustainable competitive advantage in today’s market.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Howmet Aerospace Inc. and Generac Holdings Inc. diversify their income streams and where their primary sector bets lie:
Howmet Aerospace anchors revenue in its Engine Products Segment, reaching $4.3B in 2025, dwarfing its Fastening Systems at $1.7B. Its diversification includes multiple segments, reducing concentration risk. Generac Holdings lacks available segmentation data, preventing a direct comparison. Howmet’s broad aerospace portfolio suggests an ecosystem lock-in and infrastructure dominance, positioning it well against sector cyclicality. Investors should monitor segment exposures carefully given the aerospace industry’s sensitivity to economic cycles.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Howmet Aerospace Inc. and Generac Holdings Inc.:
Howmet Aerospace Inc. Strengths
- Strong profitability with 18% net margin and 28% ROE
- Favorable liquidity ratios above 1.0
- Low debt-to-assets at 27% supports stability
- Diverse product segments including engines and fastening systems
- Solid global presence across multiple countries
Generac Holdings Inc. Strengths
- Favorable debt-to-equity and debt-to-assets ratios at 0%, indicating low leverage
- Favorable price-to-book valuation at 0, potentially undervalued
Howmet Aerospace Inc. Weaknesses
- Unfavorable high P/E at 55 and P/B at 15.5, suggesting overvaluation
- Low dividend yield at 0.22% may deter income investors
- Neutral debt-to-equity ratio of 0.57 indicates moderate leverage
Generac Holdings Inc. Weaknesses
- Poor profitability metrics with net margin under 4% and zero ROE/ROIC
- Unfavorable liquidity ratios at zero raise solvency concerns
- Negative interest coverage signals risk in meeting debt obligations
- No revenue diversification or geographic presence data available
Howmet Aerospace demonstrates robust profitability and diversified operations, yet faces valuation and dividend yield challenges. Generac struggles with profitability and liquidity, constrained by limited financial and segment data, indicating strategic risks.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only true shield protecting a company’s long-term profits from relentless competitive erosion:
Howmet Aerospace Inc. (HWM): Engineering Precision and Scale as Moat Pillars
Howmet leverages intangible assets and scale-driven cost advantages, reflected in a robust 26% EBIT margin and growing ROIC. Its aerospace specialization and global footprint deepen this moat in 2026.
Generac Holdings Inc. (GNRC): Power Generation’s Customer Lock-in
Generac’s moat rests on switching costs and brand presence in residential power solutions. Yet declining ROIC and shrinking margins signal weakening competitive positioning versus Howmet’s industrial scale.
Scale Dominance vs. Customer Lock-in: The Moat Verdict
Howmet Aerospace wields a wider, more sustainable moat through superior capital efficiency and margin expansion. It stands better equipped to defend its market share in a competitive industrial landscape.
Which stock offers better returns?
The past year reveals stark divergences in price momentum and trading patterns between Howmet Aerospace Inc. and Generac Holdings Inc., highlighting varied market appetites and growth trajectories.
Trend Comparison
Howmet Aerospace’s stock surged 267.42% over the past 12 months, exhibiting a bullish trend with accelerating momentum and high volatility, reaching a peak of 250.21.
Generac Holdings rose 93.64% in the same period, also bullish with accelerating gains, but showed lower volatility and a highest price of 224.45.
Howmet Aerospace delivered stronger market performance, outperforming Generac Holdings by a wide margin in price appreciation and trend acceleration.
Target Prices
Analysts set solid target price ranges for Howmet Aerospace and Generac Holdings, reflecting positive sector momentum.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Howmet Aerospace Inc. | 209 | 290 | 259.63 |
| Generac Holdings Inc. | 195 | 292 | 238.89 |
The consensus targets for both stocks sit above current prices, signaling analyst optimism amid industrial machinery sector strength. Howmet’s consensus of 259.63 exceeds its 250.21 price, while Generac’s 238.89 target is well above its 224.45 trading level.
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How do institutions grade them?
Here are the recent institutional grades for Howmet Aerospace Inc. and Generac Holdings Inc.:
Howmet Aerospace Inc. Grades
This table summarizes recent grades from reputable grading companies for Howmet Aerospace Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Susquehanna | Maintain | Positive | 2026-02-13 |
| Citigroup | Maintain | Buy | 2026-01-13 |
| B of A Securities | Maintain | Buy | 2025-11-14 |
| JP Morgan | Maintain | Overweight | 2025-11-10 |
| BTIG | Maintain | Buy | 2025-11-03 |
| Goldman Sachs | Maintain | Buy | 2025-11-03 |
| TD Cowen | Maintain | Buy | 2025-10-31 |
| RBC Capital | Maintain | Outperform | 2025-10-31 |
| UBS | Maintain | Neutral | 2025-10-31 |
| Truist Securities | Maintain | Buy | 2025-10-15 |
Generac Holdings Inc. Grades
This table summarizes recent grades from reputable grading companies for Generac Holdings Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Equal Weight | 2026-02-13 |
| Wells Fargo | Maintain | Overweight | 2026-02-12 |
| Guggenheim | Downgrade | Neutral | 2026-02-12 |
| Guggenheim | Maintain | Buy | 2026-02-10 |
| Barclays | Maintain | Equal Weight | 2026-01-20 |
| Canaccord Genuity | Maintain | Buy | 2026-01-13 |
| Baird | Upgrade | Outperform | 2026-01-09 |
| Citigroup | Upgrade | Buy | 2026-01-08 |
| B of A Securities | Maintain | Buy | 2026-01-07 |
| Wells Fargo | Upgrade | Overweight | 2025-12-19 |
Which company has the best grades?
Howmet Aerospace Inc. consistently receives strong buy and outperform grades from multiple top-tier institutions. Generac Holdings Inc. shows a mixed profile with several upgrades but also a recent downgrade, resulting in more moderate consensus grades. Investors may perceive Howmet as having stronger institutional confidence.
Risks specific to each company
In the challenging 2026 market environment, these categories expose the critical pressure points and systemic threats facing Howmet Aerospace Inc. and Generac Holdings Inc.:
1. Market & Competition
Howmet Aerospace Inc.
- Operates globally with diversified aerospace and transportation segments, facing intense industry competition.
Generac Holdings Inc.
- Focuses on power generation and energy storage, with rising competition from clean energy disruptors.
2. Capital Structure & Debt
Howmet Aerospace Inc.
- Maintains moderate debt (D/E 0.57) with strong interest coverage (14.11x), signaling prudent leverage.
Generac Holdings Inc.
- Reports zero debt but negative interest coverage, indicating financial distress or accounting anomalies.
3. Stock Volatility
Howmet Aerospace Inc.
- Beta at 1.25 suggests moderate sensitivity to market swings, aligning with industrial sector norms.
Generac Holdings Inc.
- Beta at 1.81 indicates high volatility, increasing risk exposure for investors.
4. Regulatory & Legal
Howmet Aerospace Inc.
- Aerospace sector faces stringent international regulations impacting production and export controls.
Generac Holdings Inc.
- Power equipment industry subject to evolving environmental and safety standards, with potential compliance costs.
5. Supply Chain & Operations
Howmet Aerospace Inc.
- Complex global supply chain with exposure to geopolitical disruptions but benefits from diversified manufacturing footprint.
Generac Holdings Inc.
- Relies on broad distribution networks; vulnerable to supply bottlenecks and component shortages.
6. ESG & Climate Transition
Howmet Aerospace Inc.
- Increasing pressure to reduce aerospace emissions; investing in sustainable materials and processes.
Generac Holdings Inc.
- Faces transition risks as energy markets shift toward renewables, requiring innovation in clean technologies.
7. Geopolitical Exposure
Howmet Aerospace Inc.
- Extensive international operations expose it to trade tensions and tariff risks across multiple countries.
Generac Holdings Inc.
- Primarily US-based, limiting geopolitical risk but sensitive to domestic policy changes.
Which company shows a better risk-adjusted profile?
Howmet Aerospace’s dominant risk is geopolitical and regulatory complexity, offset by strong financial health and moderate leverage. Generac’s greatest threat lies in financial distress signals, including negative interest coverage and high stock volatility. Howmet’s safe-zone Altman Z-score and very strong Piotroski score contrast sharply with Generac’s weaker scores. Overall, Howmet Aerospace presents a more resilient risk-adjusted profile, supported by its solid balance sheet and diversified global presence.
Final Verdict: Which stock to choose?
Howmet Aerospace Inc. (HWM) shines with a formidable economic moat, powered by exceptional capital efficiency and consistent value creation. Its ability to sustain a growing ROIC well above its cost of capital underscores strong management execution. A point of vigilance remains its rich valuation multiples, signaling premium pricing. This stock suits portfolios targeting aggressive growth with tolerance for valuation risk.
Generac Holdings Inc. (GNRC) offers a strategic moat rooted in its recurring revenue streams and steady cash flow generation, delivering relative safety compared to Howmet’s growth-driven profile. While its financial metrics show signs of strain and declining profitability, its operational niche may appeal to investors seeking GARP—growth at a reasonable price—with a focus on stability over rapid expansion.
If you prioritize long-term value creation and are comfortable with a premium valuation, Howmet Aerospace outshines as the compelling choice due to its expanding profitability and robust competitive advantage. However, if you seek a more conservative investment with steady cash flows and moderate growth, Generac could offer better stability despite its current challenges. Both present distinct analytical scenarios aligned with different investor profiles.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Howmet Aerospace Inc. and Generac Holdings Inc. to enhance your investment decisions:
