Head-To-Head Review: American Superconductor (NASDAQ:AMSC) & Novanta (NASDAQ:NOVT)

Novanta (NASDAQ:NOVT) and American Superconductor (NASDAQ:AMSC) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Insider & Institutional Ownership

98.3% of Novanta shares are held by institutional investors. Comparatively, 52.3% of American Superconductor shares are held by institutional investors. 1.2% of Novanta shares are held by company insiders. Comparatively, 4.8% of American Superconductor shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Novanta and American Superconductor”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novanta	$960.31 million	5.01	$64.09 million	$1.47	91.54
American Superconductor	$222.82 million	6.53	$6.03 million	$0.37	87.00

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

Profitability

This table compares Novanta and American Superconductor’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%
American Superconductor	5.69%	6.48%	4.54%

Risk & Volatility

Novanta has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500. Comparatively, American Superconductor has a beta of 2.96, suggesting that its stock price is 196% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Novanta and American Superconductor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novanta	2	1	0	0	1.33
American Superconductor	0	1	1	0	2.50

Novanta presently has a consensus price target of $133.00, suggesting a potential downside of 1.17%. American Superconductor has a consensus price target of $39.00, suggesting a potential upside of 21.16%. Given American Superconductor’s stronger consensus rating and higher possible upside, analysts clearly believe American Superconductor is more favorable than Novanta.

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 American Superconductor

American Superconductor Corporation, together with its subsidiaries, provides megawatt-scale power resiliency solutions worldwide. The company operates through Grid and Wind segments. The Grid segment offers products and services that enable electric utilities, industrial facilities, and renewable energy project developers to connect, transmit, and distribute power under the Gridtec Solutions brand. It provides transmission planning services, which identify power grid congestion, poor power quality, and other risks; grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems; D-VAR systems used for controlling power flow and voltage in the AC transmission system; actiVAR system, a fast-switching medium-voltage reactive compensation solution; armorVAR system installed for reactive compensation, power factor correction, loss reduction, utility bill savings, and mitigation of common power quality concerns related to power converter-based generation and load devices; and D-VAR volt var optimization (VVO) that serves the distribution power grid market. This segment also offers ship protection systems, which reduce a naval ship’s magnetic signature; and ON board power delivery systems, power generation systems, and propulsion systems; and transformers and rectifiers systems. The Wind segment designs wind turbine systems and licenses these designs to third parties under the Windtec Solutions brand. It also supplies power electronics and software-based control systems, engineered designs, and support services; and provides customer support services to wind turbine manufacturers. This segment’s design portfolio comprises a range of drivetrains and power ratings of 2 megawatts and higher. American Superconductor Corporation was incorporated in 1987 and is headquartered in Ayer, Massachusetts.