General Cable Corporation (NYSE: BGC) and MTS Systems Corporation (NASDAQ:MTSC) are both small-cap industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.
Valuation & Earnings
This table compares General Cable Corporation and MTS Systems Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|General Cable Corporation||$3.70 billion||0.22||$209.90 million||($3.57)||-4.68|
|MTS Systems Corporation||$801.32 million||0.99||$113.92 million||$1.31||35.69|
General Cable Corporation has higher revenue and earnings than MTS Systems Corporation. General Cable Corporation is trading at a lower price-to-earnings ratio than MTS Systems Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and recommmendations for General Cable Corporation and MTS Systems Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General Cable Corporation||0||2||0||0||2.00|
|MTS Systems Corporation||0||1||2||0||2.67|
MTS Systems Corporation has a consensus target price of $58.00, indicating a potential upside of 24.06%. Given MTS Systems Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe MTS Systems Corporation is more favorable than General Cable Corporation.
This table compares General Cable Corporation and MTS Systems Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|General Cable Corporation||-4.80%||13.47%||1.10%|
|MTS Systems Corporation||3.13%||12.49%||4.31%|
Risk and Volatility
General Cable Corporation has a beta of 2.82, suggesting that its stock price is 182% more volatile than the S&P 500. Comparatively, MTS Systems Corporation has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.
Insider and Institutional Ownership
99.4% of General Cable Corporation shares are held by institutional investors. 1.8% of General Cable Corporation shares are held by company insiders. Comparatively, 1.5% of MTS Systems Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
General Cable Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 4.3%. MTS Systems Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. General Cable Corporation pays out -20.2% of its earnings in the form of a dividend. MTS Systems Corporation pays out 91.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Cable Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
General Cable Corporation beats MTS Systems Corporation on 9 of the 16 factors compared between the two stocks.
General Cable Corporation Company Profile
General Cable Corporation is engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for use in the energy, industrial, construction, specialty and communications markets. The Company’s segments include North America, Europe, Latin America, and Africa/Asia Pacific. The Company produces and sells to a range of end markets, including markets for electric utility, electrical infrastructure, communications, construction and rod mill products. As of December 31, 2016, the North America segment included 17 manufacturing facilities across the region. The Europe segment consists of six manufacturing facilities across the region. The Latin America segment consists of six manufacturing facilities across the region. The Africa/Asia Pacific segment consists of four manufacturing facilities across the segment.
MTS Systems Corporation Company Profile
MTS Systems Corporation is a supplier of test systems and position sensors. The Company operates through two segments: Test and Sensors. The Test segment provides testing solutions, including hardware, software and services to ground vehicles, materials and structures markets. The Sensors segment provides position sensors for a range of industrial and mobile hydraulic applications. The Sensors segment products are used by industrial machinery and mobile equipment manufacturers to automate the operation of their products for safety and end-user productivity. The Sensors segment manufactures products utilizing magnetostriction technology. Its technology, Temposonics, offers non-contact position sensing. Its Temposonics sensors provide position feedback for motion control systems. It also provides various service offerings, including calibration, maintenance, training and consulting. The Company has its manufacturing facilities in North America, Europe and Asia.
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