Critical Review: Helios Technologies (NASDAQ:HLIO) & Highway (NASDAQ:HIHO)

Helios Technologies (NASDAQ:HLIO) and Highway (NASDAQ:HIHO) are both small-cap industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Helios Technologies and Highway, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Helios Technologies 0 1 0 0 2.00
Highway 0 0 0 0 N/A

Helios Technologies currently has a consensus price target of $43.00, indicating a potential downside of 7.96%. Given Helios Technologies’ higher possible upside, research analysts clearly believe Helios Technologies is more favorable than Highway.

Profitability

This table compares Helios Technologies and Highway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Helios Technologies 9.19% 12.57% 6.46%
Highway -4.42% -5.89% -3.92%

Dividends

Helios Technologies pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Highway pays an annual dividend of $0.25 per share and has a dividend yield of 10.2%. Helios Technologies pays out 15.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Helios Technologies and Highway’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Helios Technologies $508.05 million 2.94 $46.73 million $2.30 20.31
Highway $14.28 million 0.65 -$630,000.00 N/A N/A

Helios Technologies has higher revenue and earnings than Highway.

Volatility & Risk

Helios Technologies has a beta of 1.85, suggesting that its stock price is 85% more volatile than the S&P 500. Comparatively, Highway has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500.

Institutional & Insider Ownership

84.6% of Helios Technologies shares are owned by institutional investors. Comparatively, 7.5% of Highway shares are owned by institutional investors. 6.3% of Helios Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Helios Technologies beats Highway on 10 of the 12 factors compared between the two stocks.

Helios Technologies Company Profile

Helios Technologies, Inc. develops, manufactures, and sells solutions for the hydraulics and electronics markets. The company operates through two segments, Hydraulics and Electronics. The Hydraulics segment offers screw-in hydraulic cartridge valves, electro-hydraulics, manifolds, and integrated package solutions for the industrial and mobile hydraulics markets; quick release hydraulic coupling solutions for the agriculture, construction equipment, and industrial markets; and hydraulic, pneumatic, electronic, and instrumentation solutions to a range of industries, including agriculture, industrial, mining, and material handling. The Electronics segment designs and manufactures electronic control, display, and instrumentation solutions for recreational and off-highway vehicles, as well as stationary and power generation equipment; and electronic controller products. The company sells its hydraulic products primarily through value-add distributors, as well as directly to original equipment manufacturer customers; and electronic products to original equipment manufacturer customers. It provides its products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was formerly known as Sun Hydraulics Corporation. Helios Technologies, Inc. was founded in 1970 and is headquartered in Sarasota, Florida.

Highway Company Profile

Highway Holdings Limited, through its subsidiaries, manufactures and supplies metal, plastic, electric, and electronic components, subassemblies, and finished products for original equipment manufacturers (OEM) and contract manufacturers. The company operates in two segments, Metal Stamping and Mechanical OEM, and Electric OEM. It also engages in the trade of plastic injection products; and manufactures and assembles metal, plastic, mold, and electronic products, as well as automation equipment. The company's products are used in the manufacture of products, such as photocopiers, laser printers, print cartridges, electrical connectors, electrical circuits, vacuum cleaners, LED power supplies, stepping motors, pumps for dishwashers, and other washing machine components. In addition, it assists customers in the design and development of the tooling used in the metal and plastic manufacturing process, as well as provides an array of other manufacturing and engineering services. The company serves customers in Hong Kong/China, Europe, North America, and other Asian countries. Highway Holdings Limited was founded in 1990 and is headquartered in Sheung Shui, Hong Kong.

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