Reviewing Novanta (NOVT) and Polar Power (POLA)

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Novanta (NASDAQ: NOVT) and Polar Power (NASDAQ:POLA) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novanta 0 1 1 0 2.50
Polar Power 0 1 0 0 2.00

Novanta currently has a consensus target price of $54.00, indicating a potential downside of 13.60%. Polar Power has a consensus target price of $5.00, indicating a potential downside of 21.63%. Given Novanta’s stronger consensus rating and higher probable upside, analysts clearly believe Novanta is more favorable than Polar Power.

Profitability

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

Net Margins Return on Equity Return on Assets
Novanta 5.14% 20.02% 9.12%
Polar Power -11.79% -7.27% -6.90%

Insider and Institutional Ownership

82.7% of Novanta shares are owned by institutional investors. Comparatively, 6.9% of Polar Power shares are owned by institutional investors. 6.7% of Novanta shares are owned by company insiders. Comparatively, 61.3% of Polar Power shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Novanta and Polar Power’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Novanta $521.29 million 4.16 $60.05 million $1.60 39.06
Polar Power $14.42 million 4.49 -$750,000.00 ($0.08) -79.75

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

Volatility & Risk

Novanta has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, Polar Power has a beta of -0.87, indicating that its share price is 187% less volatile than the S&P 500.

Summary

Novanta beats Polar Power on 12 of the 14 factors compared between the two stocks.

Novanta Company Profile

Novanta Inc., together with its subsidiaries, designs, manufactures, markets, and sells photonics, vision, and precision motion components and sub-systems to original equipment manufacturers in the medical and industrial markets worldwide. The company's Photonics segment offers photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products for photonics-based applications, such as industrial material processing, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures. Its Vision segment provides 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 company's Precision Motion segment offers optical encoders, precision motor and motion control technology, air bearing spindles, and precision machined components. The company sells its products through its direct sales force, resellers, distributors, and system integrators under the Cambridge Technology, Lincoln Laser, ExoTec Precision, Synrad, Laser Quantum, WOM, Lemke, NDS, NDSsi, Reach Technology, JADAK, Skyetek, ThingMagic, Photo Research, General Scanning, Celera Motion, MicroE, Applimotion, and Westwind brands. Novanta Inc. was founded in 1968 and is headquartered in Bedford, Massachusetts.

Polar Power Company Profile

Polar Power, Inc. designs, manufactures, and sells direct current (DC) power systems for applications in the telecommunications, military, electric vehicle charging, cogeneration, distributed power, and uninterruptable power supply markets in the United States and internationally. It offers DC base power systems, DC hybrid power systems, and DC solar hybrid power systems. Polar Power, Inc. installs, sells, and services its products through its direct sales force, and a network of independent service providers and dealers. The company was formerly known as Polar Products, Inc. and changed its name to Polar Power, Inc. in October 1991. Polar Power, Inc. was founded in 1979 and is headquartered in Gardena, California.

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