Cognex (NASDAQ:CGNX) and Omron (OTCMKTS:OMRNY) Critical Survey

Cognex (NASDAQ:CGNX) and Omron (OTCMKTS:OMRNY) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Volatility and Risk

Cognex has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, Omron has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognex	0	7	10	1	2.67
Omron	0	2	0	0	2.00

Cognex presently has a consensus price target of $75.57, indicating a potential upside of 31.96%. Given Cognex’s stronger consensus rating and higher possible upside, analysts clearly believe Cognex is more favorable than Omron.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cognex	16.05%	13.50%	10.02%
Omron	4.04%	3.68%	2.42%

Dividends

Cognex pays an annual dividend of $0.34 per share and has a dividend yield of 0.6%. Omron pays an annual dividend of $0.47 per share and has a dividend yield of 1.2%. Cognex pays out 33.0% of its earnings in the form of a dividend. Omron pays out 44.8% 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. Cognex has raised its dividend for 10 consecutive years.

Institutional and Insider Ownership

88.1% of Cognex shares are owned by institutional investors. Comparatively, 1.1% of Omron shares are owned by institutional investors. 1.7% of Cognex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Cognex and Omron”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognex	$994.36 million	9.69	$114.44 million	$1.03	55.60
Omron	$5.10 billion	1.61	$188.01 million	$1.05	37.85

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

Summary

Cognex beats Omron on 14 of the 18 factors compared between the two stocks.

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.

About Omron

OMRON Corporation engages in industrial automation, device and module solutions, social systems, and healthcare businesses worldwide. The Industrial Automation Business offers sensors, switches, safety and control components, relays, motion and drives, robotics, energy conservation, power supplies, and automation system products. It also offers environmental mobility, digital devices, food and commodity, logistic and warehouse automation, medical, robotic, panel, vision, software, and traceability related solutions. The Social Systems, Solutions and Service Business provides energy, public transport, traffic safety, network protection, payment, infrastructure monitoring, management service, and DX solutions, as well as offers remote surveillance/monitoring, automation/robotics, software development, engineering/maintenance, and other services. The Healthcare Business provides cardiovascular, respiratory care, pain management, remote patient monitoring, and other solutions. The Device and Module Solutions Business offers relays, switches, connectors, and sensors. OMRON Corporation was founded in 1933 and is headquartered in Kyoto, Japan.