Comparing AMETEK (AME) and Nidec (NJDCY)

AMETEK (NYSE: AME) and Nidec (OTCMKTS:NJDCY) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Analyst Recommendations

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This is a breakdown of recent recommendations for AMETEK and Nidec, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMETEK 0 0 11 0 3.00
Nidec 0 1 1 0 2.50

AMETEK presently has a consensus price target of $81.45, suggesting a potential upside of 7.45%. Nidec has a consensus price target of $16.00, suggesting a potential downside of 58.90%. Given AMETEK’s stronger consensus rating and higher possible upside, equities analysts clearly believe AMETEK is more favorable than Nidec.

Dividends

AMETEK pays an annual dividend of $0.56 per share and has a dividend yield of 0.7%. Nidec pays an annual dividend of $0.09 per share and has a dividend yield of 0.2%. AMETEK pays out 21.5% of its earnings in the form of a dividend. Nidec pays out 10.3% 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.

Risk and Volatility

AMETEK has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Nidec has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Institutional & Insider Ownership

85.8% of AMETEK shares are held by institutional investors. Comparatively, 0.1% of Nidec shares are held by institutional investors. 2.1% of AMETEK shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares AMETEK and Nidec’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMETEK $4.30 billion 4.08 $681.47 million $2.61 29.05
Nidec $11.09 billion 4.16 $1.04 billion $0.87 44.75

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

Profitability

This table compares AMETEK and Nidec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMETEK 15.85% 16.39% 7.97%
Nidec 8.69% 13.61% 7.05%

Summary

AMETEK beats Nidec on 11 of the 16 factors compared between the two stocks.

About AMETEK

AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices worldwide. Its Electronic Instruments Group segment offers advanced instruments for the process, power and industrial, and aerospace markets; process and analytical instruments for the oil, gas, petrochemical, pharmaceutical, semiconductor, automation, and food and beverage markets; and instruments for the laboratory equipment, ultraprecision manufacturing, medical, and test and measurement markets. This segment also provides aircraft and engine sensors, monitoring systems, power supplies, data acquisition units, and fuel and fluid measurement systems for the aerospace industry; and power quality monitoring and metering, uninterruptible power systems, programmable power equipment, electromagnetic compatibility test equipment, sensors for gas turbines, dashboard instruments for heavy trucks and other vehicles, and instrumentation and controls for the food and beverage industries. Its Electromechanical Group segment offers engineered electrical connectors and electronics packaging used in aerospace and defense, medical, and industrial applications, as well as advanced precision motion control products for use in a range of automation applications across the medical, semiconductor, aerospace, defense, and food and beverage industries; high-purity powdered metals, strip and foil, specialty clad metals, and metal matrix composites; blowers and heat exchangers for aerospace and defense industries; and motors for use in commercial appliances, fitness equipment, food and beverage machines, hydraulic pumps, and industrial blowers. This segment also operates a network of aviation maintenance, repair, and overhaul facilities. In addition, the company offers clinical and education communication solutions for hospitals, health systems, and educational facilities. AMETEK, Inc. was founded in 1930 and is headquartered in Berwyn, Pennsylvania.

About Nidec

Nidec Corporation manufactures and sells motors and other electronic products worldwide. It offers brushless DC, brush DC, induction, SR, synchronous, servo, and stepping motors, as well as drive circuits; fans and blowers, such as DC axial flow, DC blower, and AC axial flow fans; and machinery, including inspection and measuring systems, automation units, control equipment, marking devices, and optical devices. The company also provides electronic and optical components comprising mechanical system components, optical system units, sensors, and electronic system components; automotive components; hard disk drive components; and other products that include music boxes and pottery craftwork equipment. In addition, it offers hotel services and sells private label products. The company's products have applications in the IT equipment, home appliances, audio and visual equipment, office equipment, healthcare and medical care, industrial equipment, and vehicle/robot industries. Nidec Corporation was founded in 1973 and is headquartered in Kyoto, Japan.

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