Park-Ohio (NASDAQ:PKOH) versus Northgate (OTCMKTS:NGTEF) Critical Review

Park-Ohio (NASDAQ:PKOH) and Northgate (OTCMKTS:NGTEF) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Park-Ohio and Northgate, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Park-Ohio	0	2	1	0	2.33
Northgate	0	0	0	0	0.00

Park-Ohio presently has a consensus target price of $59.00, suggesting a potential upside of 20.90%. Given Park-Ohio’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Park-Ohio is more favorable than Northgate.

Institutional and Insider Ownership

51.4% of Park-Ohio shares are owned by institutional investors. 31.1% of Park-Ohio shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Park-Ohio and Northgate’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Park-Ohio	1.60%	10.55%	2.81%
Northgate	N/A	N/A	N/A

Volatility and Risk

Park-Ohio has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Northgate has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Valuation & Earnings

This table compares Park-Ohio and Northgate”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Park-Ohio	$1.60 billion	0.44	$23.80 million	$1.88	25.96
Northgate	$863.72 million	0.83	N/A	N/A	N/A

Park-Ohio has higher revenue and earnings than Northgate.

Summary

Park-Ohio beats Northgate on 10 of the 11 factors compared between the two stocks.

About Park-Ohio

Park-Ohio Holdings Corp. provides supply chain management outsourcing services, capital equipment, and manufactured components in the United States, Europe, Asia, Mexico, Canada, and internationally. It operates through three segments: Supply Technologies, Assembly Components, and Engineered Products. The Supply Technologies segment offers Total Supply Management that comprises engineering and design support, part usage and cost analysis, supplier selection, quality assurance, bar coding, product packaging and tracking, just-in-time and point-of-use delivery, electronic billing, and ongoing technical support services, as well as provides spare parts and aftermarket products; and production components, such as valves, fuel hose assemblies, electro-mechanical hardware, labels, fittings, steering components, and other products. This segment also engineers and manufactures precision cold-formed and cold-extruded fasteners, and other products comprising locknuts, SPAC nuts, SPAC bolts, and wheel hardware. The Assembly Components segment offers direct fuel injection fuel rails and pipes, fuel filler pipes, and flexible multi-layer plastic and rubber assemblies; turbo charging and coolant hoses; and value-added services comprising design engineering, machining, and parts assembly. The Engineered Products segment provides engineered products, including induction heating and melting systems, pipe threading systems, and forged and machined products for ferrous and non-ferrous metals, silicon, coatings, forging, foundry, automotive, and construction equipment industries; engineers and installs mechanical forging presses; sells spare parts; field services; and forges aerospace and defense structural components, such as landing gears and struts, as well as rail products comprising railcar center plates and draft lugs. Park-Ohio Holdings Corp. was founded in 1907 and is headquartered in Cleveland, Ohio.

About Northgate

Northgate plc provides light commercial vehicle hire services in the United Kingdom, Spain, and the Republic of Ireland. It also sells used vehicles; supplies other related goods and services; and offers fleet management services. The company operates a fleet of 53,000 vehicles from 77 locations in the United Kingdom; and a fleet of 40,000 vehicles from 24 locations in Spain. It serves construction and distribution, manufacturing and engineering, and business service industries, as well as local authorities, public utilities, and retailers and wholesalers. The company was founded in 1981 and is headquartered in Darlington, the United Kingdom.