ATS (NYSE:ATS – Get Free Report) and Highway (NASDAQ:HIHO – Get Free Report) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.
Profitability
This table compares ATS and Highway’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ATS | 1.60% | 8.96% | 3.63% |
| Highway | -28.08% | -25.93% | -15.72% |
Analyst Recommendations
This is a summary of current ratings for ATS and Highway, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ATS | 1 | 3 | 3 | 0 | 2.29 |
| Highway | 1 | 0 | 0 | 0 | 1.00 |
ATS currently has a consensus target price of $42.50, indicating a potential upside of 124.30%. Given ATS’s stronger consensus rating and higher possible upside, equities analysts clearly believe ATS is more favorable than Highway.
Insider & Institutional Ownership
75.8% of ATS shares are owned by institutional investors. Comparatively, 13.2% of Highway shares are owned by institutional investors. 32.1% of Highway shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Volatility & Risk
ATS has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Highway has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.
Earnings & Valuation
This table compares ATS and Highway”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ATS | $2.15 billion | 0.85 | $51.85 million | $0.34 | 55.73 |
| Highway | $5.26 million | 0.63 | -$1.52 million | ($0.32) | -2.23 |
ATS has higher revenue and earnings than Highway. Highway is trading at a lower price-to-earnings ratio than ATS, indicating that it is currently the more affordable of the two stocks.
Summary
ATS beats Highway on 13 of the 14 factors compared between the two stocks.
About ATS
ATS Corporation, together with its subsidiaries, provides automation solutions worldwide. The company is also involved in planning, designing, building, commissioning, and servicing automated manufacturing and assembly systems, including automation products and test solutions. In addition, it offers pre-automation services comprising discovery and analysis, concept development, simulation, and total cost of ownership modelling; post automation services, including training, process optimization, preventative maintenance, emergency and on-call support, spare parts, retooling, retrofits, and equipment relocation; and contract manufacturing services, as well as after sales and services. Further, the company provides engineering design, prototyping, process verification, specification writing, software and manufacturing process controls development, standard automation products/platforms, equipment design and build, third-party equipment qualification, procurement and integration, automation system installation, product line commissioning, validation, and documentation services. Additionally, it offers value engineering, supply chain management, and integration and manufacturing capabilities, as well as other automation products and solutions; and software and digital solutions comprising connected factory floor management systems to capture, analyze, and use real time machine performance data to troubleshoot, deliver process and product solutions, prevent equipment downtime, drive operational efficiency, and unlock performance for sustainable production improvements. ATS Corporation serves life sciences, transportation and mobility, consumer products, food and beverage, electronics, nuclear, packaging, warehousing and distribution, and energy markets. The company was formerly known as ATS Automation Tooling Systems Inc. and changed its name to ATS Corporation in November 2022. ATS Corporation was founded in 1978 and is headquartered in Cambridge, Canada.
About Highway
Highway Holdings Limited, together with its subsidiaries, manufactures and supplies metal, plastic, electric, and electronic components, subassemblies, and finished products for original equipment manufacturers (OEMs) and contract manufacturers. It operates through two segments, Metal Stamping and Mechanical OEM; and Electric OEM. The company also trades in plastic injection products; and manufactures and assembles automation equipment. Its 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, the company 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, including metal stamping, screen printing, plastic injection molding, pad printing, and electronic assembly of printed circuit boards. It operates in Hong Kong and China, Europe, North America, and other Asian countries. Highway Holdings Limited was incorporated in 1990 and is headquartered in Sheung Shui, Hong Kong.
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