IPG Photonics (NASDAQ: IPGP) and AVX (NYSE:AVX) are both mid-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares IPG Photonics and AVX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IPG Photonics 27.85% 21.17% 18.56%
AVX 10.02% 6.08% 5.44%

Earnings & Valuation

This table compares IPG Photonics and AVX’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IPG Photonics $1.01 billion 13.87 $260.75 million $6.80 38.28
AVX $1.31 billion 2.33 $125.78 million $0.81 22.44

IPG Photonics has higher earnings, but lower revenue than AVX. AVX is trading at a lower price-to-earnings ratio than IPG Photonics, indicating that it is currently the more affordable of the two stocks.

Dividends

AVX pays an annual dividend of $0.46 per share and has a dividend yield of 2.5%. IPG Photonics does not pay a dividend. AVX pays out 56.8% of its earnings in the form of a dividend. AVX has increased its dividend for 5 consecutive years.

Volatility & Risk

IPG Photonics has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500. Comparatively, AVX has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for IPG Photonics and AVX, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IPG Photonics 0 3 6 0 2.67
AVX 0 2 0 0 2.00

IPG Photonics currently has a consensus target price of $172.88, indicating a potential downside of 33.58%. AVX has a consensus target price of $16.75, indicating a potential downside of 7.87%. Given AVX’s higher possible upside, analysts plainly believe AVX is more favorable than IPG Photonics.

Institutional and Insider Ownership

56.4% of IPG Photonics shares are owned by institutional investors. Comparatively, 24.7% of AVX shares are owned by institutional investors. 33.8% of IPG Photonics shares are owned by insiders. Comparatively, 0.5% of AVX shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

IPG Photonics beats AVX on 13 of the 17 factors compared between the two stocks.

About IPG Photonics

IPG Photonics Corporation is a developer and manufacturer of a line of fiber lasers, fiber amplifiers, diode lasers, laser systems and optical accessories that are used for various applications. The Company offers a line of lasers and amplifiers, which are used in materials processing, communications and medical applications. The Company sells its products globally to original equipment manufacturers (OEMs), system integrators and end users. The Company’s manufacturing facilities are located in the United States, Germany and Russia. The Company offers laser-based systems for certain markets and applications. Its products are designed to be used as general-purpose energy or light sources. Its product line includes High-Power Ytterbium CW (1,000-100,000 Watts), Mid-Power Ytterbium CW (100-999 Watts), Pulsed Ytterbium (0.1 to 200 Watts), Pulsed and CW, Quasi-CW Ytterbium (100-4,500 Watts), Erbium Amplifiers and Transceivers.

About AVX

AVX Corporation (AVX) is a manufacturer and supplier and reseller of a line of passive electronic components, interconnect devices and related products. AVX operates in three segments: Passive Components, Kyocera Electronic Devices (KED Resale) and Interconnect. The Passive Components segment consists of surface mount and leaded ceramic capacitors, surface mount and leaded tantalum capacitors, surface mount and leaded film capacitors, thick and thin film packages of multiple passive integrated components, thermistors, inductors and resistive products. The KED Resale segment consists of ceramic capacitors, frequency control devices, surface acoustic wave (SAW) devices, sensor products, radio frequency (RF) modules, actuators, acoustic devices and connectors produced by Kyocera and resold by AVX. The Interconnect segment consists primarily of AVX Interconnect automotive, telecom and memory connectors manufactured by AVX Interconnect or purchased from other manufacturers for resale.

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