Critical Analysis: Mesa Laboratories (NASDAQ:MLAB) vs. ESCO Technologies (ESE)
Mesa Laboratories (NASDAQ: MLAB) and ESCO Technologies (NYSE:ESE) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.
This table compares Mesa Laboratories and ESCO Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Mesa Laboratories pays an annual dividend of $0.64 per share and has a dividend yield of 0.5%. ESCO Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.6%. Mesa Laboratories pays out 22.9% of its earnings in the form of a dividend. ESCO Technologies pays out 16.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ESCO Technologies is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Mesa Laboratories has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, ESCO Technologies has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.
Institutional & Insider Ownership
66.7% of Mesa Laboratories shares are held by institutional investors. Comparatively, 97.6% of ESCO Technologies shares are held by institutional investors. 17.0% of Mesa Laboratories shares are held by insiders. Comparatively, 2.3% of ESCO Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Mesa Laboratories and ESCO Technologies’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Mesa Laboratories||$95.22 million||5.20||$25.86 million||$2.79||47.19|
|ESCO Technologies||$638.24 million||2.08||$108.39 million||$1.98||25.96|
ESCO Technologies has higher revenue and earnings than Mesa Laboratories. ESCO Technologies is trading at a lower price-to-earnings ratio than Mesa Laboratories, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for Mesa Laboratories and ESCO Technologies, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ESCO Technologies has a consensus price target of $66.50, indicating a potential upside of 29.38%. Given ESCO Technologies’ higher possible upside, analysts clearly believe ESCO Technologies is more favorable than Mesa Laboratories.
ESCO Technologies beats Mesa Laboratories on 8 of the 15 factors compared between the two stocks.
About Mesa Laboratories
Mesa Laboratories, Inc. is focused primarily on quality control products and services. The Company operates through four segments: Instruments, Continuous Monitoring, Biological Indicators and Cold Chain. The Instruments Division designs, manufactures and markets quality control instruments and disposable products. Its Biological Indicators Division provides testing services, along with the manufacturing and marketing of biological indicators and distribution of chemical indicators used to assess the effectiveness of sterilization processes. Its Continuous Monitoring Division designs, develops and markets systems, which are used to monitor various environmental parameters. Its Cold Chain Division provides parameter (primarily temperature) monitoring of products in a cold chain. The Company’s brands include DataTrace, DialyGuard, DryCal, Torqo, SureTorque, BGI, Mesa, PCD, Apex, CheckPoint, Mesa and TempTrust.
About ESCO Technologies
ESCO Technologies Inc. (ESCO) is a producer of engineered products and systems sold to customers for utility, industrial, aerospace and commercial applications. The Company operates through four segments: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG) and Technical Packaging. The filtration segment’s activities are managed by its subsidiaries, Crissair, Inc. (Crissair), PTI Technologies Inc. (PTI), VACCO Industries (VACCO) and Westland Technologies Inc. (Westland). The Test segment activities are managed by its subsidiaries, Beijing Lindgren ElectronMagnetic Technology Co., Ltd., ETS-Lindgren Inc. and ETS-Lindgren OY. The USG segment activities are managed by its subsidiaries, including Doble Engineering Company, Doble PowerTest Ltd and Doble TransiNor AS. The technical packaging activities are managed by its subsidiaries, Thermoform Engineered Quality LLC (TEQ), Plastique Limited and Plastique Sp. z o.o.
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