Where GE Leads, Siemens Follows

Question: How do you say "General Electric (NYSE: GE  ) " in German?

Answer: "Siemens (NYSE: SI  ) ."

That was the gist of a column I wrote last month, discussing Standpoint Research's suggestion that investors who love America's biggest industrial conglomerate would be well served by considering an even better value over in Germany: Siemens.

Like its American counterpart, the Teutonic industrial titan operates in a host of industries, building everything from complex medical gear for doctors, to gas turbines for the energy industry, to the humble light bulb. Like GE, Siemens pays a generous dividend yield (2.7%) and offers a compelling bargain on its stock price. Both stocks sell for significant discounts to the 11-plus P/E ratios more common among stocks populating the Dow Jones Industrial Average (INDEX: ^DJI). Meanwhile, Peer industrialists Boeing (NYSE: BA  ) , Textron (NYSE: TXT  ) , and United Technologies (NYSE: UTX  ) all cost more than GE or Siemens.

GE leads, and Siemens follows
That's not the only similarity between the companies, either. Last week, the world's biggest industrial conglomerate announced plans to become even bigger, as it invests in two new ventures in Russia. In the first, GE aims to manufacture and sell a range of high-tech medical diagnostic equipment in cooperation with local tech leader Russian Technologies. In the second, GE announced that it will collaborate with electric utility Inter RAO UES on a venture to manufacture gas turbines in Russia.

Before 24 hours had elapsed, Siemens announced its counterstrike. According to the press release, Siemens will invest $1 billion to build a wind turbine plant in Russia, and a second alliance with Russia's Power Machines to manufacture gas turbines.

Like, unlike
As you can see, these companies have much in common. If there's one thing that separates them, though, in terms of investability, it's that Siemens seems to have more growth potential.

Both companies see significant opportunities for expansion in the energy sphere, you see. Both think Russia offers a fertile market for energy investments. But Siemens has a lot more room to grow if these ventures succeed. Its $90 billion market cap (which was only $77 billion when Standpoint recommended it, by the way), is barely half the $173 billion market cap at its bigger Yankee brother. Best of all, with less than $4 billion net debt, versus GE's balance sheet -- which is weighed down by its large Capital segment - Siemens is the nimbler competitor.

While I like both stocks quite a lot, I suspect Siemens is the better bargain.

Which stock will turn out to be the better bet in fact? Add Siemens and GE to your Fool Watchlist, and find out.