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

Institutional & Insider Ownership

58.8% of IPG Photonics Corporation shares are owned by institutional investors. 33.8% of IPG Photonics Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Novanta 8.39% 12.60% 7.39%
IPG Photonics Corporation 26.84% 19.75% 17.31%

Analyst Recommendations

This is a summary of current ratings and target prices for Novanta and IPG Photonics Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novanta 0 0 0 0 N/A
IPG Photonics Corporation 0 3 5 0 2.63

IPG Photonics Corporation has a consensus price target of $150.00, suggesting a potential downside of 14.30%. Given IPG Photonics Corporation’s higher possible upside, analysts plainly believe IPG Photonics Corporation is more favorable than Novanta.

Valuation and Earnings

This table compares Novanta and IPG Photonics Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novanta N/A N/A N/A N/A N/A
IPG Photonics Corporation $1.20 billion 7.85 $515.19 million $5.97 29.32

IPG Photonics Corporation has higher revenue and earnings than Novanta.

Summary

IPG Photonics Corporation beats Novanta on 8 of the 8 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.

IPG Photonics Corporation Company Profile

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.

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