This study deals with the comparative analysis of performances of power system stabilizer and SVC. A 3 bus 2 generator power system network is used as a test system. Both generic PSS and multi band PSS are first analyzed. The fault analysis is carried out for the above test system with both generic and multi band PSS. It is observed that multi-band PSS resulted in better transient response for single phase faults. The multi band PSS resulted in good dynamic response due to absence of low frequency oscillations after clearing the fault. The system became unstable for three phase fault in both types of PSS. Then the SVC is connected in the above test system. The fault analysis is carried out with SVC connected at the midpoint of the above system. The simulation results show that performance of SVC for voltage and rotor angle stability is improved compared to multi-band PSS based system and also the system could regain its stability after removing three phase fault. It is also observed that SVC improves transient stability margin by increasing the critical clearing time and reducing rotor angle oscillations. The simulation is carried out using MATLAB software.