Financial Analysis: Novanta (NASDAQ:NOVT) versus Video Display (OTCMKTS:VIDE)

Novanta (NASDAQ:NOVT) and Video Display (OTCMKTS:VIDE) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Insider and Institutional Ownership

98.4% of Novanta shares are owned by institutional investors. 1.2% of Novanta shares are owned by insiders. Comparatively, 48.8% of Video Display 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 breakdown of recent ratings and price targets for Novanta and Video Display, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novanta	0	2	1	0	2.33
Video Display	0	0	0	0	0.00

Novanta currently has a consensus price target of $180.00, suggesting a potential upside of 15.64%. Given Novanta’s stronger consensus rating and higher probable upside, analysts clearly believe Novanta is more favorable than Video Display.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Novanta	5.35%	12.06%	7.70%
Video Display	N/A	N/A	N/A

Valuation & Earnings

This table compares Novanta and Video Display”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novanta	$980.60 million	5.65	$53.83 million	$1.38	112.80
Video Display	$8.30 million	0.00	-$130,000.00	($0.13)	N/A

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

Summary

Novanta beats Video Display on 10 of the 11 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 Video Display

Video Display Corporation, together with its subsidiaries, designs, engineers, manufactures, markets, distributes, and installs display products and systems for government, military, aerospace, medical, and commercial organizations worldwide. The company operates in four divisions: Simulation and Training Products; Cyber Secure Products; Data Display CRTs; and Other Computer Products. It offers dome and multi-faceted aircraft simulator display systems, video walls for broadcast and control centers, rugged video walls for combat information centers, rugged flat panel displays and computers, projector and monitor upgrades, and projection screens. The company also provides cyber security products, such as TEMPEST technology products and custom engineering solutions; and various contract services, including the design and testing solutions for defense and niche commercial uses. In addition, it manufactures and distributes cathode ray tubes (CRTs) for use in data display screens, such as computer terminal monitors, medical monitoring equipment, and various other data display applications, as well as in television sets; and distributes CRTs and other electronic tubes purchased from original equipment manufacturers, as well as offers cyber-secure keyboards. The company was founded in 1975 and is headquartered in Cocoa, Florida.