THK (OTCMKTS:THKLY) and Proto Labs (NYSE:PRLB) Financial Analysis

Proto Labs (NYSE:PRLB) and THK (OTCMKTS:THKLY) are both mid-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Proto Labs and THK”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Proto Labs	$533.13 million	4.15	$21.24 million	$1.25	73.93
THK	$1.61 billion	3.23	-$468.27 million	$0.30	72.67

Proto Labs has higher earnings, but lower revenue than THK. THK is trading at a lower price-to-earnings ratio than Proto Labs, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Proto Labs has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, THK has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Proto Labs and THK, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Proto Labs	0	2	2	0	2.50
THK	0	1	0	0	2.00

Proto Labs presently has a consensus target price of $89.00, suggesting a potential downside of 3.70%. Given Proto Labs’ stronger consensus rating and higher possible upside, equities analysts clearly believe Proto Labs is more favorable than THK.

Profitability

This table compares Proto Labs and THK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Proto Labs	5.44%	4.80%	4.22%
THK	N/A	N/A	N/A

Insider and Institutional Ownership

84.5% of Proto Labs shares are held by institutional investors. 1.3% of Proto Labs shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Proto Labs beats THK on 13 of the 14 factors compared between the two stocks.

About Proto Labs

Proto Labs, Inc., together with its subsidiaries, operates as a digital manufacturer of custom parts in the United States and Europe. The company offers injection molding; computer numerical control machining; three-dimensional printing; and sheet metal fabrication products. It serves developers and engineers, who use 3D computer-aided design software to design products across a range of end-markets. Proto Labs, Inc. was incorporated in 1999 and is headquartered in Maple Plain, Minnesota.

About THK

THK Co., Ltd. engages in the manufacture and sale of mechanical components worldwide. The company provides linear motion (LM) guides, ball screws, ball splines, LM guide actuators, cross roller rings/ double row angular contact ring, electric actuators, linear motor actuators, cam followers, roller followers, linear bushes, LM strokes, slide packs, slide rails, cross roller guides and tables, linear ball slides, LM and flat rollers, spline nuts, screw nuts, change nuts, precision linear packs, link balls, rod ends, spherical plain bearings, lubrication accessories, and seismic isolation products. Its products are used in various applications, including machine tools, general industrial machinery, precision instruments, semiconductor and LCD manufacturing equipment, industrial robots, electronic devices, and transport systems, as well as in construction, aerospace, medical and assistive, and other manufacturing industries. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.