IPG Photonics Corporation (IPGP) and Kemet Corporation (KEM) Critical Analysis

IPG Photonics Corporation (NASDAQ: IPGP) and Kemet Corporation (NYSE:KEM) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Earnings & Valuation

This table compares IPG Photonics Corporation and Kemet Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IPG Photonics Corporation $1.20 billion 8.65 $515.19 million $5.97 32.30
Kemet Corporation $846.86 million 1.43 $110.10 million $4.88 5.19

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for IPG Photonics Corporation and Kemet Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IPG Photonics Corporation 0 3 6 0 2.67
Kemet Corporation 0 1 1 0 2.50

IPG Photonics Corporation presently has a consensus price target of $158.75, indicating a potential downside of 17.69%. Kemet Corporation has a consensus price target of $18.13, indicating a potential downside of 28.39%. Given IPG Photonics Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe IPG Photonics Corporation is more favorable than Kemet Corporation.

Risk & Volatility

IPG Photonics Corporation has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500. Comparatively, Kemet Corporation has a beta of 3.56, indicating that its share price is 256% more volatile than the S&P 500.

Profitability

This table compares IPG Photonics Corporation and Kemet Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IPG Photonics Corporation 26.84% 19.75% 17.31%
Kemet Corporation 33.25% 20.21% 4.53%

Insider & Institutional Ownership

59.1% of IPG Photonics Corporation shares are held by institutional investors. Comparatively, 67.3% of Kemet Corporation shares are held by institutional investors. 33.8% of IPG Photonics Corporation shares are held by insiders. Comparatively, 3.9% of Kemet Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

IPG Photonics Corporation beats Kemet Corporation on 9 of the 14 factors compared between the two stocks.

About IPG Photonics Corporation

IPG Photonics Corporation is a developer and manufacturer of a line of fiber lasers, fiber amplifiers, diode lasers, laser systems and optical accessories that are used for various applications. The Company offers a line of lasers and amplifiers, which are used in materials processing, communications and medical applications. The Company sells its products globally to original equipment manufacturers (OEMs), system integrators and end users. The Company’s manufacturing facilities are located in the United States, Germany and Russia. The Company offers laser-based systems for certain markets and applications. Its products are designed to be used as general-purpose energy or light sources. Its product line includes High-Power Ytterbium CW (1,000-100,000 Watts), Mid-Power Ytterbium CW (100-999 Watts), Pulsed Ytterbium (0.1 to 200 Watts), Pulsed and CW, Quasi-CW Ytterbium (100-4,500 Watts), Erbium Amplifiers and Transceivers.

About Kemet Corporation

KEMET Corporation (KEMET) is a manufacturer of passive electronic components. The Company operates in two segments: Solid Capacitors, and Film and Electrolytic. The Solid Capacitors segment primarily produces tantalum, aluminum, polymer and ceramic capacitors. Solid Capacitors also produces tantalum powder used in the production of tantalum capacitors. The Film and Electrolytic Business Group produces film, paper and wet aluminum electrolytic capacitors. It also designs and produces EMI Filters. The Company’s product offerings include surface mount, which are attached directly to the circuit board; leaded capacitors, which are attached to the circuit board using lead wires, and chassis-mount and other pin-through-hole board-mount capacitors, which utilize attachment methods, such as screw terminal and snap-in. The Company sells its products to a range of original equipment manufacturers (OEMs) and electronics manufacturing services (EMS) providers.

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