Comparing IPG Photonics (NASDAQ:IPGP) and OSI Systems (NASDAQ:OSIS)

IPG Photonics (NASDAQ:IPGPGet Rating) and OSI Systems (NASDAQ:OSISGet Rating) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.

Earnings and Valuation

This table compares IPG Photonics and OSI Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IPG Photonics $1.46 billion 3.64 $278.42 million $5.21 19.67
OSI Systems $1.15 billion 1.26 $74.05 million $5.94 14.23

IPG Photonics has higher revenue and earnings than OSI Systems. OSI Systems 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 IPG Photonics and OSI Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IPG Photonics 18.84% 10.27% 8.96%
OSI Systems 9.12% 15.74% 6.91%

Risk & Volatility

IPG Photonics has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, OSI Systems has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Insider and Institutional Ownership

66.7% of IPG Photonics shares are owned by institutional investors. Comparatively, 94.0% of OSI Systems shares are owned by institutional investors. 33.5% of IPG Photonics shares are owned by company insiders. Comparatively, 5.7% of OSI Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for IPG Photonics and OSI Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IPG Photonics 2 2 4 0 2.25
OSI Systems 0 0 4 0 3.00

IPG Photonics presently has a consensus price target of $180.00, indicating a potential upside of 75.61%. OSI Systems has a consensus price target of $126.50, indicating a potential upside of 49.67%. Given IPG Photonics’ higher possible upside, equities research analysts plainly believe IPG Photonics is more favorable than OSI Systems.

Summary

IPG Photonics beats OSI Systems on 9 of the 13 factors compared between the two stocks.

About IPG Photonics (Get Rating)

IPG Photonics Corporation develops, manufactures, and sells various high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications primarily in materials processing worldwide. The company's laser products include hybrid fiber-solid state lasers with green and ultraviolet wavelengths; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers; and high-power optical fiber delivery cables, fiber couplers, beam switches, chillers, scanners, and other accessories. It also provides erbium-doped fiber and Raman amplifiers, and integrated communications systems, which are deployed in broadband networks; and ytterbium and thulium specialty fiber amplifiers and broadband light sources. In addition, the company offers integrated laser systems; 2D compact flat sheet cutter systems and multi-axis systems; welding seam stepper and picker, a fiber laser welding tool; high precision laser systems; specialized fiber laser systems; and optical transceiver and transponder modules for interconnecting electronic equipment, including Ethernet switches, IP routers and DWDM/SONET/SDH optical transport modules within telecommunications, cable multi-system operators, and data center networking applications. It's lasers and amplifiers are also used in materials processing, communications, and medical and advanced applications. The company markets its products to original equipment manufacturers, system integrators, and end users through direct sales force, as well as through agreements with independent sales representatives and distributors. IPG Photonics Corporation was founded in 1990 and is headquartered in Oxford, Massachusetts.

About OSI Systems (Get Rating)

OSI Systems, Inc. designs, manufactures, and sells electronic systems and components worldwide. It operates through three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, radiation detection, hold baggage and people screening, and explosive and narcotics trace detection systems under the Rapiscan Systems and AS&E names. It also provides site design, installation, training, and technical support services; and security screening solutions under the S2 name. The Healthcare segment offers patient monitoring and diagnostic cardiology systems, and related supplies and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, Semicoa, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC names; and LCD displays for medical, industrial, and consumer electronics applications, as well as flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.

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