Contrasting Makita (OTCMKTS:MKTAY) & NN (NASDAQ:NNBR)

Makita (OTCMKTS:MKTAY) and NN (NASDAQ:NNBR) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Earnings & Valuation

This table compares Makita and NN’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Makita $5.74 billion 2.96 $582.97 million $2.15 29.06
NN $427.53 million 0.51 -$100.59 million ($0.16) -31.94

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

Insider and Institutional Ownership

0.2% of Makita shares are owned by institutional investors. Comparatively, 84.9% of NN shares are owned by institutional investors. 1.0% of Makita shares are owned by company insiders. Comparatively, 2.1% of NN shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Makita has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, NN has a beta of 3.28, indicating that its stock price is 228% more volatile than the S&P 500.

Profitability

This table compares Makita and NN’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Makita 10.66% 10.59% 8.79%
NN 32.94% 5.90% 1.50%

Analyst Ratings

This is a breakdown of current ratings and price targets for Makita and NN, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Makita 0 1 0 0 2.00
NN 0 1 1 0 2.50

NN has a consensus price target of $9.00, suggesting a potential upside of 76.13%. Given NN’s stronger consensus rating and higher possible upside, analysts clearly believe NN is more favorable than Makita.

About Makita

Makita Corp. engages in the production and sale of electric power tools, woodworking machines, and household equipment. It operates through the following segments: Japan, Europe, North America, and Asia. Its products include drilling, fastening, cutting, grinding, sawing, sanding, pneumatic tools, and outdoor power equipment. The company was founded by Mosaburo Makita on March 21, 1915 and is headquartered in Anjo, Japan.

About NN

NN, Inc. engages in the design and manufacture high-precision components and assemblies primarily for the electrical, automotive, general industrial, aerospace and defense, and medical markets. It operates through the Mobile Solutions and Power Solutions segments. The Mobile Solutions segment manufactures system critical components for fuel systems, engines and transmissions, power steering systems, and electromechanical motors. The Power Solutions segment designs and produces a broad range of high-precision metal and plastic components, assemblies, and finished devices used in applications ranging from power control to flight control, and for military devices. The company was founded by Richard D. Ennen in October 1980 and is headquartered in Charlotte, NC.

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