Powell Industries, Inc.’s POWL robust momentum can be largely attributed to its strong foothold and improving conditions in two key markets, which are oil and gas and petrochemical. The company’s first-quarter fiscal 2025 (ended December 2024) results indicated strong year-over-year growth, with revenues growing 24.4% to $241.4 million, driven by persistent strength and healthy levels of project activity across these two markets.

Several favorable trends across the oil, gas and petrochemical end markets, including growth in energy transition projects, such as biofuels, carbon capture and hydrogen, have been driving the company’s performance. Also, significant project awards, supported by high investments in LNG, related gas processing and petrochemical processes, have set Powell apart as a leading supplier of critical electrical infrastructure.

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 $1.3 billion while exiting the fiscal first quarter. New orders totaled $269 million in the fiscal first quarter compared with $198 million in the year-ago quarter.

POWL remains committed to rewarding its shareholders handsomely through dividend payouts. The company used $3.2 million to distribute dividends in the first three months of 2025. In fiscal 2024, it paid dividends of $12.7 million, up 2.4% year over year. Also, in second-quarter fiscal 2025, it hiked its quarterly dividend by approximately 1%.

POWL’s Price Performance

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In the past month, this Zacks Rank #3 (Hold) company has gained 3.9% against the electronics manufacturing industry’s 12.7% decline.

Despite the positives, it has been subject to the adverse impacts of high operating costs and expenses. For instance, in the first quarter of fiscal 2025, Powell Industries' cost of sales increased 24.8% year over year due to high raw material costs. Selling, general and administrative expenses rose 5.6% in the same period. Also, in fiscal 2024, its cost of sales climbed 34% year over year, while selling, general and administrative expenses increased 7.7%.

POWL utilizes several raw materials, including steel, copper, aluminum and various engineered electrical components, in its businesses. The persistence of supply-chain constraints, particularly for specifically engineered components, might inflate its costs and affect its margins.

Stocks to Consider

Some better-ranked stocks from the same space are discussed below.

Enersys ENS presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

It has a trailing four-quarter earnings surprise of 2.2%, on average. The consensus estimate for ENS’ fiscal 2025 (ending March 2025) earnings has increased 2.3% in the past 60 days.

Emerson Electric Co. EMR presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 4.3%. 

The Zacks Consensus Estimate for EMR’s fiscal 2025 (ending September 2025) earnings has improved 1% in the past 60 days.

AZZ Inc. AZZ currently carries a Zacks Rank of 2. AZZ delivered a trailing four-quarter average earnings surprise of 15.2%. In the past 60 days, the Zacks Consensus Estimate for AZZ’s fiscal 2025 (ended February 2025) earnings has decreased 1.3%.

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Emerson Electric Co. (EMR) : Free Stock Analysis Report

AZZ Inc. (AZZ) : Free Stock Analysis Report

Enersys (ENS) : Free Stock Analysis Report

Powell Industries, Inc. (POWL) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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