Contrasting Vicor (NASDAQ:VICR) & Novanta (NASDAQ:NOVT)

Novanta (NASDAQ:NOVT) and Vicor (NASDAQ:VICR) are both mid-cap technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Insider and Institutional Ownership

98.3% of Novanta shares are held by institutional investors. Comparatively, 47.5% of Vicor shares are held by institutional investors. 1.2% of Novanta shares are held by company insiders. Comparatively, 28.3% of Vicor shares are held 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.

Risk and Volatility

Novanta has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500. Comparatively, Vicor has a beta of 2.37, indicating that its share price is 137% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Novanta	5.35%	12.06%	7.70%
Vicor	30.65%	19.83%	18.18%

Analyst Recommendations

This is a summary of recent ratings for Novanta and Vicor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novanta	0	2	1	0	2.33
Vicor	0	2	3	0	2.60

Novanta presently has a consensus target price of $180.00, suggesting a potential upside of 26.27%. Vicor has a consensus target price of $381.67, suggesting a potential upside of 84.05%. Given Vicor’s stronger consensus rating and higher probable upside, analysts plainly believe Vicor is more favorable than Novanta.

Earnings & Valuation

This table compares Novanta and Vicor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novanta	$980.60 million	5.49	$53.83 million	$1.38	103.30
Vicor	$452.70 million	20.88	$118.56 million	$3.12	66.46

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

Summary

Vicor beats Novanta on 11 of the 14 factors compared between the two stocks.

About Novanta

Novanta, Inc. engages in the provision of core technology solutions to healthcare and advanced industrial original equipment manufacturers. It operates through the following segments: Photonics, Vision, and Precision Motion. The Photonics segment designs, manufactures, and markets photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products. The Vision segment offers a range of medical grade technologies, including medical insufflators, pumps and related disposables, surgical displays and operating room integration technologies, optical data collection and machine vision technologies, radio frequency identification technologies, thermal printers, spectrometry technologies, and embedded touch screen solutions. The Precision Motion segment includes optical encoders, precision motor and motion control technology, air bearing spindles, and precision machined components to customers. The company was founded in 1968 and is headquartered in Bedford, MA.

About Vicor

Vicor Corporation, together with its subsidiaries, designs, develops, manufactures, and markets modular power components and power systems for converting electrical power in the United States, Europe, the Asia Pacific, and internationally. The company offers a range of brick-format DC-DC converters; complementary components provide AC line rectification, input filtering, power factor correction, and transient protection; and input and output voltage, and output power products, as well as electrical and mechanical accessories. It also design, sells, and service custom power systems solutions. The company serves independent manufacturers of electronic devices, original equipment manufacturers, and their contract manufacturers in the aerospace and aviation, defense electronics, satellites, factory automation, instrumentation, test equipment, transportation, telecommunications and networking infrastructure and vehicles, and transportation markets. Vicor Corporation was incorporated in 1981 and is headquartered in Andover, Massachusetts.