Roper Technologies (NYSE: ROP) and Cognex (NASDAQ:CGNX) are both industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Earnings and Valuation

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This table compares Roper Technologies and Cognex’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Roper Technologies $4.61 billion 6.12 $971.77 million $9.42 29.12
Cognex $747.95 million 11.75 $177.17 million $1.45 35.07

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

Volatility & Risk

Roper Technologies has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Cognex has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500.

Institutional and Insider Ownership

94.3% of Roper Technologies shares are held by institutional investors. Comparatively, 82.3% of Cognex shares are held by institutional investors. 2.5% of Roper Technologies shares are held by company insiders. Comparatively, 5.4% of Cognex shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Roper Technologies 21.09% 15.28% 6.84%
Cognex 23.69% 24.23% 21.65%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Roper Technologies and Cognex, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Roper Technologies 0 3 7 0 2.70
Cognex 0 4 4 0 2.50

Roper Technologies currently has a consensus target price of $297.64, indicating a potential upside of 8.49%. Cognex has a consensus target price of $64.58, indicating a potential upside of 27.01%. Given Cognex’s higher possible upside, analysts clearly believe Cognex is more favorable than Roper Technologies.

Dividends

Roper Technologies pays an annual dividend of $1.65 per share and has a dividend yield of 0.6%. Cognex pays an annual dividend of $0.18 per share and has a dividend yield of 0.4%. Roper Technologies pays out 17.5% of its earnings in the form of a dividend. Cognex pays out 12.4% 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. Roper Technologies has raised its dividend for 19 consecutive years. Roper Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cognex beats Roper Technologies on 9 of the 17 factors compared between the two stocks.

About Roper Technologies

Roper Technologies, Inc. designs and develops software, and engineered products and solutions. It operates in four segments: RF Technology; Medical & Scientific Imaging; Industrial Technology; and Energy Systems & Controls. The company offers radio frequency identification (RFID) communication technology and software solutions, including application management software, software-as-a-service applications, card systems/integrated security solutions, toll and traffic systems, RFID card readers, and metering and remote monitoring products. It also offers diagnostic and laboratory software solutions; patient positioning devices and related software, 3-D measurement technology, and diagnostic and therapeutic disposable products; non-invasive instruments and video laryngoscopes; and a cloud-based financial analytics and performance software platform, as well as electron filters, charged couple devices, and complementary metal oxide semiconductor cameras, detectors, and related software. In addition, the company offers water meter and automatic meter reading products and systems, fluid handling pumps, materials analysis equipment and consumables, flow measurement and metering equipment, industrial valves and controls, and industrial leak testing products. Further, it provides control systems, fluid properties testing equipment, valves, vibration sensors and controls, and non-destructive inspection and measurement products and solutions. Additionally, the company provides enterprise software and information solutions for government contractors, professional services firms, and other project-based businesses. It serves healthcare, food, energy, water, education, and construction industries, as well as law and professional services firms in the United States and internationally. The company was formerly known as Roper Industries, Inc. and changed its name to Roper Technologies, Inc. in April 2015. Roper Technologies, Inc. was founded in 1981 and is based in Sarasota, Florida.

About Cognex

Cognex Corporation provides machine vision products that capture and analyze visual information in order to automate tasks primarily in manufacturing processes worldwide. The company offers machine vision products, which are used to automate the manufacturing and tracking of discrete items, such as mobile phones, aspirin bottles, and automobile tires by locating, identifying, inspecting, and measuring them during the manufacturing or distribution process. Its products include VisionPro, a software suite that provides various vision tools for programming; displacement sensors with vision software for use in 3D application; In-Sight vision systems that perform various vision tasks, including part location, identification, measurement, assembly verification, and robotic guidance; In-Sight vision sensors; ID products, including DataMan barcode readers and barcode verifiers, as well as vision-enabled mobile terminals for industrial barcode reading applications; and barcode scanning software development kits. The company sells its products to customers in the consumer electronics and automotive industries, and semiconductor and electronics capital equipment markets through direct sales force, as well as through a network of distributors and integrators. Cognex Corporation was founded in 1981 and is headquartered in Natick, Massachusetts.

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