Contrasting Nidec (OTCMKTS:NJDCY) & Novanta (NASDAQ:NOVT)

Novanta (NASDAQ:NOVT) and Nidec (OTCMKTS:NJDCY) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Earnings and Valuation

This table compares Novanta and Nidec”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novanta	$949.24 million	4.63	$64.09 million	$1.47	83.48
Nidec	$17.12 billion	1.82	$1.11 billion	$0.26	12.54

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

Volatility & Risk

Novanta has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500. Comparatively, Nidec has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Profitability

This table compares Novanta and Nidec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novanta	5.50%	14.53%	7.82%
Nidec	6.82%	10.15%	5.24%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Novanta and Nidec, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novanta	2	1	0	0	1.33
Nidec	0	2	0	0	2.00

Novanta currently has a consensus target price of $133.00, indicating a potential upside of 8.38%. Given Novanta’s higher possible upside, equities analysts clearly believe Novanta is more favorable than Nidec.

Insider and Institutional Ownership

98.4% of Novanta shares are owned by institutional investors. Comparatively, 0.2% of Nidec shares are owned by institutional investors. 1.2% of Novanta shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Novanta beats Nidec on 9 of the 13 factors compared between the two stocks.

About Novanta

Novanta, Inc. engages in the provision of core technology solutions to healthcare and advanced industrial original equipment manufacturers. It operates through the following segments: Photonics, Vision, and Precision Motion. The Photonics segment designs, manufactures, and markets photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products. The Vision segment offers a range of medical grade technologies, including medical insufflators, pumps and related disposables, surgical displays and operating room integration technologies, optical data collection and machine vision technologies, radio frequency identification technologies, thermal printers, spectrometry technologies, and embedded touch screen solutions. The Precision Motion segment includes optical encoders, precision motor and motion control technology, air bearing spindles, and precision machined components to customers. The company was founded in 1968 and is headquartered in Bedford, MA.

About Nidec

Nidec Corporation, together with its subsidiaries, develops, manufactures, and sells motors, electronics and optical components, and other related products in Japan and internationally. The company offers medium- and large-size motors, small-size and precision motors, motor-related products, units and modules, automotive components, mechanical equipment/machine tools, inspection and measuring equipment, electronic devices, sensors, and other products, as well as mold, molding, cutting, and machining components. Its products are used for applications in robotics, IoT products, automotive components, home appliances, logistics/agriculture, information technology, office automation, mobile optical components, medical and health care products, housing equipment, commercial and professional products, industrial machinery, and processing/inspection equipment. The company was incorporated in 1973 and is headquartered in Kyoto, Japan..