Mesa Laboratories (NASDAQ: MLAB) and Cognex Corporation (NASDAQ:CGNX) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitabiliy, valuation, analyst recommendations, dividends, earnings and risk.

Valuation & Earnings

This table compares Mesa Laboratories and Cognex Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mesa Laboratories $93.67 million 5.74 $25.82 million $2.91 49.40
Cognex Corporation $559.49 million 13.79 $197.09 million $2.04 43.64

Cognex Corporation has higher revenue and earnings than Mesa Laboratories. Cognex Corporation is trading at a lower price-to-earnings ratio than Mesa Laboratories, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

65.2% of Mesa Laboratories shares are owned by institutional investors. Comparatively, 88.7% of Cognex Corporation shares are owned by institutional investors. 17.0% of Mesa Laboratories shares are owned by company insiders. Comparatively, 5.6% of Cognex Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Mesa Laboratories has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, Cognex Corporation has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Profitability

This table compares Mesa Laboratories and Cognex Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mesa Laboratories 11.94% 17.67% 9.74%
Cognex Corporation 32.23% 18.99% 17.54%

Dividends

Mesa Laboratories pays an annual dividend of $0.64 per share and has a dividend yield of 0.4%. Cognex Corporation pays an annual dividend of $0.34 per share and has a dividend yield of 0.4%. Mesa Laboratories pays out 22.0% of its earnings in the form of a dividend. Cognex Corporation pays out 16.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Mesa Laboratories and Cognex Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mesa Laboratories 0 0 1 0 3.00
Cognex Corporation 0 5 4 0 2.44

Cognex Corporation has a consensus price target of $71.29, suggesting a potential downside of 19.92%. Given Cognex Corporation’s higher probable upside, analysts plainly believe Cognex Corporation is more favorable than Mesa Laboratories.

Summary

Cognex Corporation beats Mesa Laboratories on 12 of the 16 factors compared between the two stocks.

Mesa Laboratories Company Profile

Mesa Laboratories, Inc. is focused primarily on quality control products and services. The Company operates through four segments: Instruments, Continuous Monitoring, Biological Indicators and Cold Chain. The Instruments Division designs, manufactures and markets quality control instruments and disposable products. Its Biological Indicators Division provides testing services, along with the manufacturing and marketing of biological indicators and distribution of chemical indicators used to assess the effectiveness of sterilization processes. Its Continuous Monitoring Division designs, develops and markets systems, which are used to monitor various environmental parameters. Its Cold Chain Division provides parameter (primarily temperature) monitoring of products in a cold chain. The Company’s brands include DataTrace, DialyGuard, DryCal, Torqo, SureTorque, BGI, Mesa, PCD, Apex, CheckPoint, Mesa and TempTrust.

Cognex Corporation Company Profile

Cognex Corporation (Cognex) is a provider of machine vision products that capture and analyze visual information in order to automate tasks, primarily in manufacturing processes, where vision is required. The Company operates through the machine vision technology segment. The Company’s machine vision products are used to automate the manufacture and tracking of discrete items, such as mobile phones, aspirin bottles and automobile tires, by locating, identifying, inspecting and measuring them during the manufacturing or distribution process. The Company’s products include vision software, vision systems, vision sensors and identification (ID) products. Its products range from vision sensors that are integrated, to personal computer (PC)-based systems for users. Its products also have a range of physical forms, depending upon the user’s need. Cognex sells its products through a direct sales force, as well as through a global network of integration and distribution partners.

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