Novanta (NASDAQ: NOVT) and CTS (NYSE:CTS) are both small-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
Valuation & Earnings
This table compares Novanta and CTS’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Novanta||$521.29 million||3.79||$60.05 million||$1.63||35.00|
|CTS||$422.99 million||2.12||$14.44 million||$0.43||63.37|
Institutional and Insider Ownership
82.7% of Novanta shares are held by institutional investors. Comparatively, 94.5% of CTS shares are held by institutional investors. 8.3% of Novanta shares are held by insiders. Comparatively, 1.8% of CTS shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Novanta has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, CTS has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.
This table compares Novanta and CTS’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and price targets for Novanta and CTS, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Novanta presently has a consensus price target of $54.00, suggesting a potential downside of 5.35%. Given Novanta’s higher possible upside, analysts clearly believe Novanta is more favorable than CTS.
CTS pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Novanta does not pay a dividend. CTS pays out 37.2% of its earnings in the form of a dividend.
Novanta beats CTS on 13 of the 15 factors compared between the two stocks.
Novanta Company Profile
Novanta Inc., formerly GSI Group Inc., designs, develops, manufactures and sells precision photonic and motion control components and subsystems. The Company’s segments are Photonics, Vision and Precision Motion. The Photonics segment designs, manufactures and markets photonics-based solutions, including carbon dioxide (CO2) laser sources, laser scanning and laser beam delivery products, to customers around the world. The Vision Technologies segment designs, manufactures and markets a range of medical grade technologies, including visualization solutions, imaging informatics products, optical data collection and machine vision technologies, radio frequency identification (RFID) technologies, and thermal printers, to customers around the world. The Company’s Precision Motion segment designs, manufactures and markets optical encoders, precision motors and other motion control technology, air bearing spindles and precision machined components to customers around the world.
CTS Company Profile
CTS Corporation is a manufacturer of sensors, electronic components and actuators. The Company designs, manufactures and sells a line of sensors, electronic components and actuators primarily to original equipment manufacturers (OEMs) for the transportation, industrial, medical, information technology, defense and aerospace, and communications markets. It operates manufacturing facilities in North America, Asia and Europe. Its products perform specific electronic functions for a given product family and are intended for use in customer assemblies. The Company’s products consist principally of sensors and actuators used in passenger or commercial vehicles; electronic components used in communications infrastructure, information technology and other high-speed applications; switches and potentiometers supplied to multiple markets, and fabricated piezoelectric materials and substrates used primarily in medical, industrial, defense and aerospace, and information technology markets.
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