Sparton Corporation (NYSE: SPA) and Coherent (NASDAQ:COHR) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitabiliy, valuation and analyst recommendations.

Volatility & Risk

Sparton Corporation has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, Coherent has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Sparton Corporation and Coherent, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sparton Corporation 0 2 0 0 2.00
Coherent 0 1 5 0 2.83

Sparton Corporation presently has a consensus target price of $22.00, suggesting a potential downside of 4.72%. Coherent has a consensus target price of $237.50, suggesting a potential downside of 13.60%. Given Sparton Corporation’s higher probable upside, equities research analysts clearly believe Sparton Corporation is more favorable than Coherent.

Profitability

This table compares Sparton Corporation and Coherent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sparton Corporation -10.61% 12.79% 4.34%
Coherent 9.84% 19.66% 11.13%

Earnings and Valuation

This table compares Sparton Corporation and Coherent’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sparton Corporation $400.14 million 0.57 $22.79 million ($4.34) -5.32
Coherent $1.24 billion 5.46 $276.91 million $4.93 55.76

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

Institutional and Insider Ownership

66.3% of Sparton Corporation shares are owned by institutional investors. Comparatively, 93.3% of Coherent shares are owned by institutional investors. 5.0% of Sparton Corporation shares are owned by insiders. Comparatively, 1.4% of Coherent shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Coherent beats Sparton Corporation on 11 of the 14 factors compared between the two stocks.

About Sparton Corporation

Sparton Corporation is a provider of design, development and manufacturing services for electromechanical devices, as well as engineered products complementary to the same electromechanical value stream. The Company operates through two segments: Manufacturing & Design Services (MDS) and Engineered Components & Products (ECP). The Company serves the medical and biotechnology, military and aerospace, and industrial and commercial markets. Its products and services include offerings for original equipment manufacturers (OEM) and emerging technology (ET) customers, which utilize microprocessor-based systems, such as transducers, printed circuit boards and assemblies, and sensors, as well as development and design engineering services. It develops and manufactures sonobuoys, which are anti-submarine warfare (ASW) devices. The Company also manufactures rugged flat panel display systems for military panel personal computer workstations, air traffic control and industrial applications.

About Coherent

Coherent, Inc. is a photonics manufacturer. The Company is engaged in designing, manufacturing, servicing and marketing of lasers and related accessories for a range of scientific, commercial and industrial applications. It operates through two segments: Specialty Lasers and Systems (SLS) and Commercial Lasers and Components (CLC). SLS develops and manufactures configurable products serving the microelectronics, scientific research and government programs, and original equipment manufacturer (OEM) components and instrumentation markets. The Commercial Lasers and Components segment focuses on higher volume products that are offered in set configurations. The product architectures are designed for exchange at the point of use such that substantially all product service and repairs are based upon advanced replacement and depot (that is factory) repair. CLC’s primary markets include materials processing, OEM components, and instrumentation and microelectronics.

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