CTS Corporation (NYSE: CTS) and Novanta (NASDAQ:GSIG) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Valuation & Earnings

This table compares CTS Corporation and Novanta’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CTS Corporation $407.12 million 1.87 $76.03 million $0.91 25.44
Novanta N/A N/A N/A N/A N/A

CTS Corporation has higher revenue and earnings than Novanta.

Dividends

CTS Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. Novanta does not pay a dividend. CTS Corporation pays out 17.6% of its earnings in the form of a dividend. CTS Corporation has increased its dividend for 3 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
CTS Corporation 7.49% 11.54% 7.08%
Novanta 8.39% 12.60% 7.39%

Institutional and Insider Ownership

93.4% of CTS Corporation shares are held by institutional investors. 1.8% of CTS Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for CTS Corporation and Novanta, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CTS Corporation 0 2 1 0 2.33
Novanta 0 0 0 0 N/A

CTS Corporation presently has a consensus price target of $24.50, suggesting a potential upside of 5.83%. Given CTS Corporation’s higher probable upside, equities analysts plainly believe CTS Corporation is more favorable than Novanta.

Summary

CTS Corporation beats Novanta on 7 of the 11 factors compared between the two stocks.

CTS Corporation Company Profile

CTS Corporation is a manufacturer of sensors, electronic components and actuators. The Company designs, manufactures and sells a line of sensors, electronic components and actuators primarily to original equipment manufacturers (OEMs) for the transportation, industrial, medical, information technology, defense and aerospace, and communications markets. It operates manufacturing facilities in North America, Asia and Europe. Its products perform specific electronic functions for a given product family and are intended for use in customer assemblies. The Company’s products consist principally of sensors and actuators used in passenger or commercial vehicles; electronic components used in communications infrastructure, information technology and other high-speed applications; switches and potentiometers supplied to multiple markets, and fabricated piezoelectric materials and substrates used primarily in medical, industrial, defense and aerospace, and information technology markets.

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.

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