Omega Flex (NASDAQ: OFLX) and Sun Hydraulics (NASDAQ:SNHY) are both small-cap industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.
Volatility and Risk
Omega Flex has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Sun Hydraulics has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.
Institutional and Insider Ownership
24.2% of Omega Flex shares are held by institutional investors. Comparatively, 70.7% of Sun Hydraulics shares are held by institutional investors. 44.9% of Omega Flex shares are held by insiders. Comparatively, 10.0% of Sun Hydraulics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Omega Flex pays an annual dividend of $0.88 per share and has a dividend yield of 1.4%. Sun Hydraulics pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. Omega Flex pays out 56.8% of its earnings in the form of a dividend. Sun Hydraulics pays out 30.3% 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.
Earnings and Valuation
This table compares Omega Flex and Sun Hydraulics’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Omega Flex||$101.80 million||6.04||$15.66 million||$1.55||39.29|
|Sun Hydraulics||$196.93 million||8.99||$23.30 million||$1.19||47.24|
Sun Hydraulics has higher revenue and earnings than Omega Flex. Omega Flex is trading at a lower price-to-earnings ratio than Sun Hydraulics, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for Omega Flex and Sun Hydraulics, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sun Hydraulics has a consensus target price of $64.33, indicating a potential upside of 14.43%. Given Sun Hydraulics’ higher possible upside, analysts clearly believe Sun Hydraulics is more favorable than Omega Flex.
This table compares Omega Flex and Sun Hydraulics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Sun Hydraulics beats Omega Flex on 9 of the 15 factors compared between the two stocks.
About Omega Flex
Omega Flex, Inc. is a manufacturer of flexible metal hose. The Company is engaged in a range of different markets, including construction, manufacturing, transportation, petrochemical, pharmaceutical and other industries. It operates through manufacture and sale of flexible metal hose and accessories segment. Its products are concentrated in residential and commercial construction, and general industrial markets. Its primary product, flexible gas piping, is used for gas piping within residential and commercial buildings. Its TracPipe and TracPipe CounterStrike flexible gas piping, along with its fittings, which are distributed under AutoSnap and AutoFlare names. Its products are manufactured at its Exton, Pennsylvania facilities in the United States, and in Banbury, Oxfordshire in the United Kingdom. It has sales across all industries are generated through independent outside sales organizations, such as sales representatives, wholesalers and distributors or a combination of both.
About Sun Hydraulics
Sun Hydraulics Corporation (Sun) develops and manufactures solutions for the hydraulics and electronics markets. It is engaged in power controls and vehicle technologies lines of business. The Company operates through two segments including hydraulics and electronics. Hydraulics market segment is engaged in manufacturing of screw-in hydraulic cartridge valves, electro-hydraulics, manifolds, and integrated package solutions for the worldwide industrial and mobile hydraulics markets operating under the brand Sun Hydraulics. Electronics market segment provides electronic control, display and instrumentation solutions for both recreational and off-highway vehicles, as well as stationary and power generation equipment and that offered under the brands of Enovation Controls, Murphy and Zero Off.
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