Head-To-Head Analysis: IPG Photonics (NASDAQ:IPGP) vs. Photronics (NASDAQ:PLAB)

Photronics (NASDAQ:PLAB) and IPG Photonics (NASDAQ:IPGP) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Institutional & Insider Ownership

88.4% of Photronics shares are held by institutional investors. Comparatively, 93.8% of IPG Photonics shares are held by institutional investors. 3.9% of Photronics shares are held by insiders. Comparatively, 38.0% of IPG Photonics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Photronics and IPG Photonics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Photronics	15.07%	9.10%	7.80%
IPG Photonics	-14.20%	4.32%	3.89%

Analyst Ratings

This is a summary of recent recommendations for Photronics and IPG Photonics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Photronics	0	0	1	0	3.00
IPG Photonics	1	3	2	1	2.43

Photronics presently has a consensus price target of $35.00, suggesting a potential upside of 42.45%. IPG Photonics has a consensus price target of $93.50, suggesting a potential upside of 25.67%. Given Photronics’ stronger consensus rating and higher probable upside, equities analysts plainly believe Photronics is more favorable than IPG Photonics.

Valuation and Earnings

This table compares Photronics and IPG Photonics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Photronics	$866.95 million	1.79	$130.69 million	$2.09	11.76
IPG Photonics	$1.29 billion	2.50	$218.88 million	($3.47)	-21.44

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

Volatility & Risk

Photronics has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, IPG Photonics has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Summary

Photronics beats IPG Photonics on 8 of the 15 factors compared between the two stocks.

About Photronics

Photronics, Inc., together with its subsidiaries, engages in the manufacture and sale of photomask products and services in the United States, Taiwan, China, Korea, Europe, and internationally. It offers photomasks that are used in the manufacture of integrated circuits and flat panel displays (FPDs); and to transfer circuit patterns onto semiconductor wafers, and FDP substrates. The company offers electrical and optical components. It sells its products to semiconductor and FPD manufacturers, designers, and foundries, as well as to other high-performance electronics manufacturers through its sales personnel and customer service representatives. The company was formerly known as Photronic Labs, Inc. and changed its name to Photronics, Inc. in 1990. Photronics, Inc. was incorporated in 1969 and is based in Brookfield, Connecticut.

About IPG Photonics

IPG Photonics Corporation develops, manufactures, and sells various high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications primarily in materials processing worldwide. Its laser products include hybrid fiber-solid state lasers with green and ultraviolet wavelengths; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers; and high-power optical fiber delivery cables, fiber couplers, beam switches, chillers, scanners, and other accessories. The company also offers integrated laser systems; LightWELD, a handheld laser welding system; 2D compact flat sheet cutter systems and multi-axis systems for fine welding, cutting, and drilling; welding seam stepper and picker, a fiber laser welding tool; high precision laser systems; specialized fiber laser systems for material processing applications; robotic and multi-axis workstations for welding, cutting and cladding, flatbed cutting systems, and diode markers; and laser and non-laser robotic welding and automation solutions. It serves materials processing, communications, medical procedures, and advanced applications and communications markets. The company markets its products to original equipment manufacturers, system integrators, and end users through direct sales force, as well as through agreements with independent sales representatives and distributors. IPG Photonics Corporation was founded in 1990 and is headquartered in Marlborough, Massachusetts.