Novanta (NASDAQ:NOVT) & Amphenol (NYSE:APH) Critical Review

Novanta (NASDAQ:NOVT) and Amphenol (NYSE:APH) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Novanta	6.00%	10.83%	7.53%
Amphenol	17.73%	39.87%	14.80%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Novanta and Amphenol, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novanta	0	2	1	0	2.33
Amphenol	0	2	15	1	2.94

Novanta presently has a consensus target price of $194.00, suggesting a potential upside of 50.63%. Amphenol has a consensus target price of $98.56, suggesting a potential upside of 24.24%. Given Novanta’s higher probable upside, analysts clearly believe Novanta is more favorable than Amphenol.

Risk & Volatility

Novanta has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, Amphenol has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novanta	$1.03 billion	4.73	$53.83 million	$1.56	82.56
Amphenol	$29.01 billion	6.74	$4.27 billion	$2.00	39.66

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

Institutional & Insider Ownership

98.3% of Novanta shares are held by institutional investors. Comparatively, 97.0% of Amphenol shares are held by institutional investors. 1.2% of Novanta shares are held by insiders. Comparatively, 1.4% of Amphenol shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Amphenol beats Novanta on 11 of the 15 factors compared between the two stocks.

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.

About Amphenol

Amphenol Corporation, together with its subsidiaries, primarily designs, manufactures, and markets electrical, electronic, and fiber optic connectors in the United States, China, and internationally. It operates through three segments: Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems. The company offers connectors and connector systems, including harsh environment data, power, high-speed, fiber optic, and radio frequency interconnect products; busbars and power distribution systems; and other connectors. It also provides value-add products, such as backplane interconnect systems, cable assemblies and harnesses, and cable management products; other products comprising flexible and rigid printed circuit boards, hinges, other mechanical, and production related products. In addition, the company offers consumer device, network infrastructure, and other antennas; coaxial, power, and specialty cables; and sensors and sensor-based products. It sells its products through its sales force, independent representatives, and a network of electronics distributors to original equipment manufacturers, electronic manufacturing services companies, original design manufacturers, and service providers in the automotive, broadband communication, commercial aerospace, industrial, information technology and data communication, military, mobile device, and mobile network markets. Amphenol Corporation was founded in 1932 and is headquartered in Wallingford, Connecticut.