Novanta (NASDAQ: NOVT) and Bel Fuse (NASDAQ:BELFB) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Novanta 12.45% 18.29% 9.56%
Bel Fuse 2.50% 9.79% 3.82%

Risk & Volatility

Novanta has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Bel Fuse has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Novanta and Bel Fuse, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novanta 0 0 1 0 3.00
Bel Fuse 0 1 1 0 2.50

Novanta presently has a consensus target price of $54.00, indicating a potential downside of 8.78%. Bel Fuse has a consensus target price of $39.00, indicating a potential upside of 70.31%. Given Bel Fuse’s higher probable upside, analysts plainly believe Bel Fuse is more favorable than Novanta.

Dividends

Bel Fuse pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Novanta does not pay a dividend. Bel Fuse pays out 28.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

79.0% of Novanta shares are owned by institutional investors. Comparatively, 60.4% of Bel Fuse shares are owned by institutional investors. 8.3% of Novanta shares are owned by insiders. Comparatively, 8.8% of Bel Fuse shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Novanta and Bel Fuse’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Novanta $384.76 million 5.32 $22.00 million $1.68 35.24
Bel Fuse $500.15 million 0.55 -$64.83 million $0.98 23.37

Novanta has higher earnings, but lower revenue than Bel Fuse. Bel Fuse 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 Bel Fuse on 11 of the 15 factors compared between the two stocks.

Novanta Company Profile

Novanta Inc., formerly GSI Group Inc., designs, develops, manufactures and sells precision photonic and motion control components and subsystems. The Company’s segments are Photonics, Vision and Precision Motion. The Photonics segment designs, manufactures and markets photonics-based solutions, including carbon dioxide (CO2) laser sources, laser scanning and laser beam delivery products, to customers around the world. The Vision Technologies segment designs, manufactures and markets a range of medical grade technologies, including visualization solutions, imaging informatics products, optical data collection and machine vision technologies, radio frequency identification (RFID) technologies, and thermal printers, to customers around the world. The Company’s Precision Motion segment designs, manufactures and markets optical encoders, precision motors and other motion control technology, air bearing spindles and precision machined components to customers around the world.

Bel Fuse Company Profile

Bel Fuse Inc. (Bel) designs, manufactures and markets a range of products that power, protect and connect electronic circuits. The Company’s products include magnetic solutions, power solutions and protection, and connectivity solutions. The Company’s operating segments are North America, Asia and Europe. The Company markets magnetic solutions under the brand names, including Bel, TRP, MagJack and Signal. The Company markets power solutions and protection under the brand names, which include Bel Power Solutions, Power-One and Melcher. The Company markets connectivity solutions under the brand names Stratos, Fibreco, Cinch, Johnson, Trompeter, Midwest Microwave, Semflex and Stewart Connector. The Company’s products are used in the networking, telecommunications, computing, military, aerospace, transportation and broadcasting industries. Bel’s portfolio of products has application in the automotive, medical and consumer electronics markets.

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