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

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

Analyst Recommendations

This is a breakdown of current ratings for Vicor and Novanta, as reported by MarketBeat.

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

Vicor currently has a consensus target price of $381.67, indicating a potential upside of 80.88%. Novanta has a consensus target price of $180.00, indicating a potential upside of 27.17%. Given Vicor’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Vicor is more favorable than Novanta.

Risk & Volatility

Vicor has a beta of 2.33, suggesting that its stock price is 133% more volatile than the S&P 500. Comparatively, Novanta has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Earnings & Valuation

This table compares Vicor and Novanta”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vicor	$452.70 million	21.25	$118.56 million	$3.12	67.63
Novanta	$980.60 million	5.45	$53.83 million	$1.38	102.57

Vicor has higher earnings, but lower revenue 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.

Profitability

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

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

Insider & Institutional Ownership

47.5% of Vicor shares are owned by institutional investors. Comparatively, 98.3% of Novanta shares are owned by institutional investors. 28.3% of Vicor shares are owned by company insiders. Comparatively, 1.2% of Novanta shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

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

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.

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.