Financial Review: Cognex (NASDAQ:CGNX) vs. Crane NXT (NYSE:CXT)

Crane NXT (NYSE:CXT) and Cognex (NASDAQ:CGNX) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Earnings and Valuation

This table compares Crane NXT and Cognex”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crane NXT	$1.80 billion	1.66	$145.10 million	$2.42	21.45
Cognex	$994.36 million	10.86	$114.44 million	$1.03	62.35

Crane NXT has higher revenue and earnings than Cognex. Crane NXT is trading at a lower price-to-earnings ratio than Cognex, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Crane NXT has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Cognex has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Profitability

This table compares Crane NXT and Cognex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crane NXT	7.78%	19.87%	7.43%
Cognex	16.05%	13.50%	10.02%

Dividends

Crane NXT pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Cognex pays an annual dividend of $0.34 per share and has a dividend yield of 0.5%. Crane NXT pays out 29.8% of its earnings in the form of a dividend. Cognex pays out 33.0% 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. Crane NXT has increased its dividend for 2 consecutive years and Cognex has increased its dividend for 10 consecutive years. Crane NXT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

77.5% of Crane NXT shares are held by institutional investors. Comparatively, 88.1% of Cognex shares are held by institutional investors. 0.8% of Crane NXT shares are held by company insiders. Comparatively, 1.7% of Cognex shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Crane NXT and Cognex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crane NXT	0	2	4	1	2.86
Cognex	0	5	10	2	2.82

Crane NXT currently has a consensus price target of $68.20, suggesting a potential upside of 31.36%. Cognex has a consensus price target of $75.64, suggesting a potential upside of 17.79%. Given Crane NXT’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Crane NXT is more favorable than Cognex.

Summary

Cognex beats Crane NXT on 10 of the 18 factors compared between the two stocks.

About Crane NXT

Crane NXT, Co. operates as an industrial technology company that provides technology solutions to secure, detect, and authenticate customers’ important assets. The company operates through Crane Payment Innovations and Crane Currency segments. The Crane Payment Innovations segment offers electronic equipment and associated software, as well as advanced automation solutions, processing systems, field service solutions, remote diagnostics, and productivity software solutions. The Crane Currency segment provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods, and industrial products. Crane NXT, Co. was incorporated in 2021 and is based in Waltham, Massachusetts.

About Cognex

Cognex Corporation provides machine vision products that capture and analyze visual information to automate manufacturing and distribution tasks worldwide. Its machine vision products are used to automate the manufacturing and tracking of discrete items, including mobile phones, electric vehicle batteries, and e-commerce packages by locating, identifying, inspecting, and measuring them during the manufacturing or distribution process. The company offers VisionPro software, a suite of patented vision tools for advanced programming; QuickBuild that allows customers to build vision applications with a graphical, flowchart-based programming interface; and Cognex deep learning vision software. It also provides a range of inspection tasks, including part location, identification, measurement, assembly verification, and robotic guidance; vision sensors for vision applications, such as checking the presence and size of parts; and the In-Sight product line of vision systems and sensors. In addition, the company offers DataMan, an image-based barcode readers and barcode verifiers. It sells its products to automotive, logistics, consumer electronics, medical-related, semiconductor, consumer products, food and beverage, and others, as well as through a network of distributors and integrators. The company was incorporated in 1981 and is headquartered in Natick, Massachusetts.