Head to Head Review: Nidec (NJDCY) versus Generac (GNRC)

Nidec (OTCMKTS: NJDCY) and Generac (NYSE:GNRC) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Dividends

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Nidec pays an annual dividend of $0.09 per share and has a dividend yield of 0.2%. Generac does not pay a dividend. Nidec pays out 10.3% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Nidec and Generac’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nidec $11.09 billion 4.11 $1.04 billion $0.87 44.24
Generac $1.67 billion 1.77 $160.29 million $3.40 13.97

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

Insider and Institutional Ownership

0.1% of Nidec shares are owned by institutional investors. 3.0% of Generac shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Nidec and Generac, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nidec 0 1 1 0 2.50
Generac 1 4 4 0 2.33

Nidec presently has a consensus target price of $16.00, suggesting a potential downside of 58.43%. Generac has a consensus target price of $51.83, suggesting a potential upside of 9.12%. Given Generac’s higher possible upside, analysts plainly believe Generac is more favorable than Nidec.

Profitability

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

Net Margins Return on Equity Return on Assets
Nidec 8.69% 13.61% 7.05%
Generac 9.53% 45.26% 10.95%

Risk & Volatility

Nidec has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Generac has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500.

Summary

Generac beats Nidec on 9 of the 16 factors compared between the two stocks.

Nidec Company Profile

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.

Generac Company Profile

Generac Holdings Inc. designs, manufactures, and sells power generation equipment and other engine powered products for the residential, light commercial, and industrial markets worldwide. The company offers engines, alternators, transfer switches, and other components fueled by natural gas, liquid propane, gasoline, diesel, and bi-fuel. It also provides residential automatic standby generators ranging in output from 6kW to 60kW; air-cooled engine residential standby generators ranging from 6kW to 22kW; liquid-cooled engine generators with outputs ranging from 22kW to 60kW; cellular-based remote monitoring system for home standby generators; and industrial diesel generators ranging in sizes up to 3,250kW. In addition, the company offers various portable generators ranging in size from 800W to 17.5kW; engine driven power washers; water pumps; and outdoor power equipment, such as trimmers and brush mowers, log splitters, lawn and leaf vacuums, and chipper shredders. Further, it provides light towers, mobile generators, and flameless heaters; light-commercial standby generators ranging from 22kW to 150kW and related transfer switches providing three-phase power small and mid-sized businesses; and industrial generators ranging in output from 10kW up to 3,250kW as emergency backup for large healthcare, telecom, datacom, commercial office, municipal, and manufacturing markets. Additionally, the company sells aftermarket service parts to dealers, product accessories, and proprietary engines to third-party original equipment manufacturers. It distributes its products through independent residential dealers, industrial distributors and dealers, national and regional retailers, e-commerce merchants, electrical and HVAC wholesalers, catalogs, and equipment rental companies and distributors; and directly to end users under the Powermate, DeWalt, DR, and Pramac brand names. Generac Holdings Inc. was founded in 1959 and is headquartered in Waukesha, Wisconsin.

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