Proto Labs (NYSE: PRLB) and Park-Ohio Holdings Corp. (NASDAQ:PKOH) are both small-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Profitability

This table compares Proto Labs and Park-Ohio Holdings Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Proto Labs 14.59% 11.75% 10.71%
Park-Ohio Holdings Corp. 2.50% 16.90% 4.14%

Volatility & Risk

Proto Labs has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Park-Ohio Holdings Corp. has a beta of 3.42, meaning that its share price is 242% more volatile than the S&P 500.

Earnings & Valuation

This table compares Proto Labs and Park-Ohio Holdings Corp.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Proto Labs $312.73 million 6.35 $85.30 million $1.71 43.65
Park-Ohio Holdings Corp. $1.31 billion 0.39 $111.10 million $2.66 15.58

Park-Ohio Holdings Corp. has higher revenue and earnings than Proto Labs. Park-Ohio Holdings Corp. is trading at a lower price-to-earnings ratio than Proto Labs, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

55.1% of Park-Ohio Holdings Corp. shares are owned by institutional investors. 7.8% of Proto Labs shares are owned by insiders. Comparatively, 31.0% of Park-Ohio Holdings Corp. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Proto Labs and Park-Ohio Holdings Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Proto Labs 0 3 0 0 2.00
Park-Ohio Holdings Corp. 0 0 1 0 3.00

Proto Labs currently has a consensus price target of $56.00, suggesting a potential downside of 24.98%. Park-Ohio Holdings Corp. has a consensus price target of $43.50, suggesting a potential upside of 4.95%. Given Park-Ohio Holdings Corp.’s stronger consensus rating and higher possible upside, analysts clearly believe Park-Ohio Holdings Corp. is more favorable than Proto Labs.

Dividends

Park-Ohio Holdings Corp. pays an annual dividend of $0.50 per share and has a dividend yield of 1.2%. Proto Labs does not pay a dividend. Park-Ohio Holdings Corp. pays out 18.8% of its earnings in the form of a dividend.

Summary

Park-Ohio Holdings Corp. beats Proto Labs on 11 of the 16 factors compared between the two stocks.

About Proto Labs

Proto Labs, Inc. is an e-commerce driven digital manufacturer of on-demand three dimensional (3D) printed, computer numerical control (CNC) machined and injection-molded custom parts for prototyping and short-run production. The Company’s geographic segments include the United States, Europe and Japan. The Company targets its products to the product developers and engineers who use 3D computer-aided design (3D CAD) software to design products across a range of end markets. Its product lines include Injection Molding, CNC Machining and 3D Printing. Its Injection Molding product line is used for prototype, on-demand and short-run production. Its CNC Machining product line uses commercially available CNC machines to cut plastic or metal blocks into one or more custom parts based on the 3D CAD model uploaded by the product developer or engineer. Its 3D Printing product line includes stereolithography (SL), selective laser sintering (SLS) and direct metal laser sintering (DMLS) processes.

About Park-Ohio Holdings Corp.

Park-Ohio Holdings Corp. is a diversified international company providing supply chain management outsourcing services, capital equipment used on their production lines and manufactured components used to assemble its products. The Company operates in three segments: Supply Technologies, Assembly Components and Engineered Products. Supply Technologies provides its customers with Total Supply Management, which manages every aspect of supplying production parts and materials to its customers’ manufacturing floor, from strategic planning to program implementation. Assembly Components manufactures products oriented towards fuel efficiency and reduced emission standards. Engineered Products segment operates a group of manufacturing businesses that design and manufacture a range of products, including induction heating and melting systems, pipe threading systems, and forged and machined products. It operates through the subsidiaries of its direct subsidiary, Park-Ohio Industries, Inc.

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