Nidec (OTCMKTS:NJDCY – Get Free Report) and Advanced Energy Industries (NASDAQ:AEIS – Get Free Report) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.
Insider and Institutional Ownership
0.2% of Nidec shares are held by institutional investors. Comparatively, 99.7% of Advanced Energy Industries shares are held by institutional investors. 1.3% of Advanced Energy Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Dividends
Nidec pays an annual dividend of $0.02 per share and has a dividend yield of 0.8%. Advanced Energy Industries pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. Nidec pays out -2.9% of its earnings in the form of a dividend. Advanced Energy Industries pays out 7.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Nidec is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Nidec has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Advanced Energy Industries has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.
Profitability
This table compares Nidec and Advanced Energy Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nidec | -17.80% | -33.77% | -13.88% |
| Advanced Energy Industries | 10.77% | 20.75% | 10.39% |
Analyst Ratings
This is a summary of current ratings for Nidec and Advanced Energy Industries, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nidec | 0 | 2 | 0 | 0 | 2.00 |
| Advanced Energy Industries | 0 | 2 | 11 | 1 | 2.93 |
Advanced Energy Industries has a consensus price target of $409.50, indicating a potential upside of 89.03%. Given Advanced Energy Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Advanced Energy Industries is more favorable than Nidec.
Valuation & Earnings
This table compares Nidec and Advanced Energy Industries”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nidec | $17.99 billion | 1.33 | -$3.73 billion | ($0.70) | -3.57 |
| Advanced Energy Industries | $1.80 billion | 4.82 | $148.40 million | $5.36 | 40.42 |
Advanced Energy Industries has lower revenue, but higher earnings than Nidec. Nidec is trading at a lower price-to-earnings ratio than Advanced Energy Industries, indicating that it is currently the more affordable of the two stocks.
Summary
Advanced Energy Industries beats Nidec on 13 of the 17 factors compared between the two stocks.
About Nidec
Nidec Corporation, together with its subsidiaries, develops, manufactures, and sells motors, electronics and optical components, and other related products in Japan and internationally. The company offers medium- and large-size motors, small-size and precision motors, motor-related products, units and modules, automotive components, mechanical equipment/machine tools, inspection and measuring equipment, electronic devices, sensors, and other products, as well as mold, molding, cutting, and machining components. Its products are used for applications in robotics, IoT products, automotive components, home appliances, logistics/agriculture, information technology, office automation, mobile optical components, medical and health care products, housing equipment, commercial and professional products, industrial machinery, and processing/inspection equipment. The company was incorporated in 1973 and is headquartered in Kyoto, Japan..
About Advanced Energy Industries
Advanced Energy Industries, Inc. provides precision power conversion, measurement, and control solutions in the United States and internationally. The company's plasma power products offer solutions to enable innovation for semiconductor and thin film plasma processes, such as dry etch and deposition. It also provides high and low voltage power products used in a range of applications, such as semiconductor equipment, industrial production, medical and life science equipment, data centers computing, networking, and telecommunications. In addition, the company supplies sensing, controls, and instrumentation products for advanced measurement and calibration of power and temperature. Further, the company provides calibration, conversions, upgrades, and refurbishments and used equipment to companies, as well as repair services. Further, it offers warranty and after-market repair services. It offers its products through a direct sales force, independent sales representatives, channel partners, and distributors. Advanced Energy Industries, Inc. was incorporated in 1981 and is headquartered in Denver, Colorado.
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