Novanta (NASDAQ: NOVT) and TE Connectivity (NYSE:TEL) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.
This table compares Novanta and TE Connectivity’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
79.0% of Novanta shares are held by institutional investors. Comparatively, 90.2% of TE Connectivity shares are held by institutional investors. 8.3% of Novanta shares are held by company insiders. Comparatively, 1.3% of TE Connectivity shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Novanta has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, TE Connectivity has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for Novanta and TE Connectivity, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Novanta currently has a consensus target price of $54.00, suggesting a potential downside of 8.78%. TE Connectivity has a consensus target price of $149.09, suggesting a potential upside of 48.01%. Given TE Connectivity’s higher possible upside, analysts plainly believe TE Connectivity is more favorable than Novanta.
Valuation & Earnings
This table compares Novanta and TE Connectivity’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Novanta||$384.76 million||5.32||$22.00 million||$1.36||43.53|
|TE Connectivity||$13.11 billion||2.70||$1.68 billion||$4.71||21.39|
TE Connectivity has higher revenue and earnings than Novanta. TE Connectivity is trading at a lower price-to-earnings ratio than Novanta, indicating that it is currently the more affordable of the two stocks.
TE Connectivity pays an annual dividend of $1.60 per share and has a dividend yield of 1.6%. Novanta does not pay a dividend. TE Connectivity pays out 34.0% of its earnings in the form of a dividend. Novanta has raised its dividend for 7 consecutive years.
TE Connectivity beats Novanta on 9 of the 17 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.
TE Connectivity Company Profile
TE Connectivity Ltd. is a technology company. The Company designs and manufactures connectivity and sensors solutions. It operates through three segments: Transportation Solutions, Industrial Solutions and Communications Solutions. The Transportation Solutions segment offers connectivity and sensor technologies. Its products are used in the automotive, commercial transportation and sensors markets. It sells primary products, including terminals and connector systems and components, sensors, relays, application tooling, and wire and heat shrink tubing. The Industrial Solutions segment is a supplier of products that connect and distribute power, data and signals. The Industrial Solutions segment offers products, such as terminals and connector systems and components; heat shrink tubing; relays, and wire and cable. The Communications Solutions segment is a supplier of electronic components for the data and devices and appliances markets.
Receive News & Ratings for Novanta Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Novanta and related companies with MarketBeat.com's FREE daily email newsletter.