Hollysys Automation Technologies (NASDAQ: HOLI) and General Cable Corporation (NYSE:BGC) are both small-cap industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

68.0% of Hollysys Automation Technologies shares are owned by institutional investors. Comparatively, 98.1% of General Cable Corporation shares are owned by institutional investors. 1.8% of General Cable Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Hollysys Automation Technologies and General Cable Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hollysys Automation Technologies 1 1 2 0 2.25
General Cable Corporation 0 2 0 0 2.00

Hollysys Automation Technologies presently has a consensus target price of $19.65, suggesting a potential downside of 13.69%. Given Hollysys Automation Technologies’ stronger consensus rating and higher probable upside, equities analysts clearly believe Hollysys Automation Technologies is more favorable than General Cable Corporation.

Valuation & Earnings

This table compares Hollysys Automation Technologies and General Cable Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hollysys Automation Technologies $431.94 million 3.18 $80.86 million $1.15 19.80
General Cable Corporation $3.70 billion 0.30 $209.90 million ($3.57) -6.22

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

Dividends

Hollysys Automation Technologies pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. General Cable Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 3.2%. Hollysys Automation Technologies pays out 10.4% of its earnings in the form of a dividend. General Cable Corporation pays out -20.2% 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. General Cable Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Hollysys Automation Technologies and General Cable Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hollysys Automation Technologies 15.96% 9.87% 6.74%
General Cable Corporation -4.80% 13.47% 1.10%

Risk and Volatility

Hollysys Automation Technologies has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, General Cable Corporation has a beta of 2.85, suggesting that its stock price is 185% more volatile than the S&P 500.

Summary

General Cable Corporation beats Hollysys Automation Technologies on 8 of the 15 factors compared between the two stocks.

Hollysys Automation Technologies Company Profile

Hollysys Automation Technologies Ltd. is a provider of automation and control technologies, and products. The Company’s segments include Industrial Automation (IA), Rail Transportation (rail), Mechanical and Electrical (M&E), and Miscellaneous. Its technologies are applied through its industrial automation solution suite, including the Distributed Control Systems, Programmable Logic Controller, Real-time Management Information System, HolliAS Asset Management System, Operator Training System, Batch Application Package, Advanced Process Control Package (HolliAS APC Suite), Safety Instrumentation System (SIS), railway signaling system of Train Control Center, Automatic Train Protection, Subway Supervisory and Control platform, nuclear power non-safety automation and control system HolliAs-NMS DCS and other products. It serves customers in the industrial, railway, subway, nuclear power, and mechanical and electronic industries in China, Southeast Asia, India, Europe and the Middle East.

General Cable Corporation Company Profile

General Cable Corporation is engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for use in the energy, industrial, construction, specialty and communications markets. The Company’s segments include North America, Europe, Latin America, and Africa/Asia Pacific. The Company produces and sells to a range of end markets, including markets for electric utility, electrical infrastructure, communications, construction and rod mill products. As of December 31, 2016, the North America segment included 17 manufacturing facilities across the region. The Europe segment consists of six manufacturing facilities across the region. The Latin America segment consists of six manufacturing facilities across the region. The Africa/Asia Pacific segment consists of four manufacturing facilities across the segment.

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