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Here's Why You Should Retain Powell Industries in Your Portfolio
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Key Takeaways
Powell's Q2 fiscal 2026 revenues rose 6% to $297 million on strong project activity.
POWL's backlog reached $1.8 billion, boosted by utility, industrial and data center orders.
Powell continues shareholder returns through dividends despite rising costs and tariff concerns.
Powell Industries, Inc.’s (POWL - Free Report) robust momentum can be largely attributed to its strong foothold and strength in several key markets, including oil and gas, electric utility, and commercial & other industrial. The company’s results for the second quarter of fiscal 2026 (ended March 2026) indicated strong year-over-year growth, with revenues growing 6% to $297 million, driven by persistent strength and healthy levels of project activity across the electric utility and commercial & other industrial markets.
Growing investments across power generation and electrical distribution markets have been driving demand for the company’s products in the electric utility market. Several favorable trends across the oil and gas market, including growth in energy transition projects, such as biofuels, sustainable aviation fuel, carbon capture and hydrogen production, are likely to be favorable for the company.
The company’s diversification efforts beyond its core oil, gas and petrochemical markets have enhanced its market share across the utility, commercial and other industrial markets. It has been capitalizing on the global growth trends of electrification and digitalization. This has enabled it to generate solid bookings, leading to a strong backlog level of $1.8 billion while exiting the fiscal second quarter. New orders totaled $490 million in the fiscal second quarter compared with $249 million in the year-ago quarter.
It’s worth noting that in second-quarter fiscal 2026, the company secured a data center and an electric utility order, each worth about $75 million. Also, after the end of the second quarter, it booked another mega data center order worth more than $400 million.
POWL remains committed to rewarding its shareholders handsomely through dividend payouts. The company used $6.5 million to distribute dividends in the first six months of fiscal 2026. In fiscal 2025, it paid dividends of $12.9 million, up 1.6% year over year. Also, in February 2026, it hiked its quarterly dividend by approximately 0.9%.
POWL’s Price Performance
Image Source: Zacks Investment Research
Year to date, this Zacks Rank #3 (Hold) company has gained 66.5% compared with the electronics manufacturing industry’s 18% growth.
Despite the positives, it has been subject to the adverse impacts of high operating costs and expenses. For instance, in the first six months of fiscal 2026, Powell Industries’ cost of sales increased 3% year over year, while selling, general and administrative expenses rose 17.9%. Also, in fiscal 2025, its cost of sales climbed 5.5% year over year, while selling, general and administrative expenses increased 12.4%.
POWL utilizes several raw materials, including steel, copper, aluminum and various engineered electrical components, in its businesses. The persistence of tariff-related concerns, particularly for steel and aluminum, might also inflate costs and delay the delivery of products to its customers.
Stocks to Consider
Some better-ranked stocks from the same space are discussed below.
HLIO delivered a trailing four-quarter average earnings surprise of 15.7%. In the past 60 days, the Zacks Consensus Estimate for Helios Technologies’ 2026 earnings has increased 5.5%.
Tennant Company (TNC - Free Report) presently sports a Zacks Rank of 1. TNC delivered an earnings surprise of 141.7% in the last reported quarter.
In the past 60 days, the consensus estimate for Tennant’s 2026 earnings has increased 5.8%.
Luxfer Holdings (LXFR - Free Report) presently sports a Zacks Rank of 1. LXFR delivered a trailing four-quarter average earnings surprise of 25.5%.
In the past 60 days, the consensus estimate for LXFR’s 2026 earnings has increased 7.1%.
View the Zacks #1 Rank List
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Here's Why You Should Retain Powell Industries in Your Portfolio
Key Takeaways
Powell Industries, Inc.’s (POWL - Free Report) robust momentum can be largely attributed to its strong foothold and strength in several key markets, including oil and gas, electric utility, and commercial & other industrial. The company’s results for the second quarter of fiscal 2026 (ended March 2026) indicated strong year-over-year growth, with revenues growing 6% to $297 million, driven by persistent strength and healthy levels of project activity across the electric utility and commercial & other industrial markets.
Growing investments across power generation and electrical distribution markets have been driving demand for the company’s products in the electric utility market. Several favorable trends across the oil and gas market, including growth in energy transition projects, such as biofuels, sustainable aviation fuel, carbon capture and hydrogen production, are likely to be favorable for the company.
The company’s diversification efforts beyond its core oil, gas and petrochemical markets have enhanced its market share across the utility, commercial and other industrial markets. It has been capitalizing on the global growth trends of electrification and digitalization. This has enabled it to generate solid bookings, leading to a strong backlog level of $1.8 billion while exiting the fiscal second quarter. New orders totaled $490 million in the fiscal second quarter compared with $249 million in the year-ago quarter.
It’s worth noting that in second-quarter fiscal 2026, the company secured a data center and an electric utility order, each worth about $75 million. Also, after the end of the second quarter, it booked another mega data center order worth more than $400 million.
POWL remains committed to rewarding its shareholders handsomely through dividend payouts. The company used $6.5 million to distribute dividends in the first six months of fiscal 2026. In fiscal 2025, it paid dividends of $12.9 million, up 1.6% year over year. Also, in February 2026, it hiked its quarterly dividend by approximately 0.9%.
POWL’s Price Performance
Image Source: Zacks Investment Research
Year to date, this Zacks Rank #3 (Hold) company has gained 66.5% compared with the electronics manufacturing industry’s 18% growth.
Despite the positives, it has been subject to the adverse impacts of high operating costs and expenses. For instance, in the first six months of fiscal 2026, Powell Industries’ cost of sales increased 3% year over year, while selling, general and administrative expenses rose 17.9%. Also, in fiscal 2025, its cost of sales climbed 5.5% year over year, while selling, general and administrative expenses increased 12.4%.
POWL utilizes several raw materials, including steel, copper, aluminum and various engineered electrical components, in its businesses. The persistence of tariff-related concerns, particularly for steel and aluminum, might also inflate costs and delay the delivery of products to its customers.
Stocks to Consider
Some better-ranked stocks from the same space are discussed below.
Helios Technologies (HLIO - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HLIO delivered a trailing four-quarter average earnings surprise of 15.7%. In the past 60 days, the Zacks Consensus Estimate for Helios Technologies’ 2026 earnings has increased 5.5%.
Tennant Company (TNC - Free Report) presently sports a Zacks Rank of 1. TNC delivered an earnings surprise of 141.7% in the last reported quarter.
In the past 60 days, the consensus estimate for Tennant’s 2026 earnings has increased 5.8%.
Luxfer Holdings (LXFR - Free Report) presently sports a Zacks Rank of 1. LXFR delivered a trailing four-quarter average earnings surprise of 25.5%.
In the past 60 days, the consensus estimate for LXFR’s 2026 earnings has increased 7.1%.