IPG Photonics (NASDAQ: IPGP) and AVX (NYSE:AVX) are both mid-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.
Insider & Institutional 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 company insiders. Comparatively, 0.5% of AVX shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of recent ratings and target prices for IPG Photonics and AVX, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
IPG Photonics currently has a consensus price target of $172.88, indicating a potential downside of 32.52%. AVX has a consensus price target of $16.75, indicating a potential downside of 6.94%. Given AVX’s higher possible upside, analysts clearly believe AVX is more favorable than IPG Photonics.
Earnings and 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||13.65||$260.75 million||$6.80||37.68|
|AVX||$1.31 billion||2.31||$125.78 million||$0.81||22.22|
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.
Volatility & Risk
IPG Photonics has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500. Comparatively, AVX has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.
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|
AVX pays an annual dividend of $0.46 per share and has a dividend yield of 2.6%. 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.
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.
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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