Fabrinet (NYSE:FN) and IPG Photonics (NASDAQ:IPGP) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
Institutional and Insider Ownership
94.5% of Fabrinet shares are owned by institutional investors. Comparatively, 63.4% of IPG Photonics shares are owned by institutional investors. 0.7% of Fabrinet shares are owned by company insiders. Comparatively, 34.0% of IPG Photonics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Risk & Volatility
Fabrinet has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, IPG Photonics has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.
Valuation and Earnings
This table compares Fabrinet and IPG Photonics' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Fabrinet | $1.64 billion | 2.01 | $113.48 million | $3.14 | 28.48 |
| IPG Photonics | $1.31 billion | 9.72 | $180.23 million | $4.36 | 54.75 |
IPG Photonics has lower revenue, but higher earnings than Fabrinet. Fabrinet is trading at a lower price-to-earnings ratio than IPG Photonics, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Fabrinet and IPG Photonics' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Fabrinet | 7.18% | 13.37% | 9.41% |
| IPG Photonics | 9.04% | 7.76% | 6.85% |
Analyst Recommendations
This is a summary of recent ratings and target prices for Fabrinet and IPG Photonics, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Fabrinet | 0 | 3 | 5 | 0 | 2.63 |
| IPG Photonics | 0 | 4 | 5 | 0 | 2.56 |
Fabrinet currently has a consensus target price of $72.00, suggesting a potential downside of 19.49%. IPG Photonics has a consensus target price of $230.9444, suggesting a potential downside of 3.25%. Given IPG Photonics' higher possible upside, analysts plainly believe IPG Photonics is more favorable than Fabrinet.
Summary
IPG Photonics beats Fabrinet on 8 of the 13 factors compared between the two stocks.
