Sun Hydraulics (SNHY) vs. Highway (HIHO) Critical Analysis

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

Profitability

This table compares Sun Hydraulics and Highway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sun Hydraulics 7.29% 10.64% 6.34%
Highway 5.86% 8.58% 5.64%

Analyst Recommendations

This is a summary of recent ratings and target prices for Sun Hydraulics and Highway, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sun Hydraulics 0 3 4 0 2.57
Highway 0 0 0 0 N/A

Sun Hydraulics presently has a consensus target price of $54.50, suggesting a potential upside of 51.10%. Given Sun Hydraulics’ higher possible upside, analysts clearly believe Sun Hydraulics is more favorable than Highway.

Dividends

Sun Hydraulics pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Highway pays an annual dividend of $0.20 per share and has a dividend yield of 6.9%. Sun Hydraulics pays out 22.5% of its earnings in the form of a dividend.

Insider and Institutional Ownership

87.1% of Sun Hydraulics shares are held by institutional investors. Comparatively, 8.7% of Highway shares are held by institutional investors. 7.8% of Sun Hydraulics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Sun Hydraulics and Highway’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sun Hydraulics $342.84 million 3.36 $31.55 million $1.60 22.54
Highway $19.17 million 0.58 $1.55 million N/A N/A

Sun Hydraulics has higher revenue and earnings than Highway.

Volatility & Risk

Sun Hydraulics has a beta of 1.76, meaning that its stock price is 76% more volatile than the S&P 500. Comparatively, Highway has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Summary

Sun Hydraulics beats Highway on 12 of the 14 factors compared between the two stocks.

Sun Hydraulics Company Profile

Helios Technologies designs, manufactures, and sells screw-in hydraulic cartridge valves, manifolds, and integrated fluid power packages and subsystems used in hydraulic systems worldwide. The company operates through two segments, Hydraulics and Electronics. Its screw-in hydraulic cartridge valves and manifolds control force, speed, and motion as integral components in fluid power systems. The company offers various screw-in hydraulic cartridge valves, including electrically actuated and non-electrically actuated products; electro-hydraulics; manifolds that are machined to create threaded cavities and channels; and integrated package solutions, which consists of multiple cartridge valves assembled into a custom designed manifolds for industrial and mobile hydraulics markets under the Sun Hydraulics brand name. It also designs and manufactures electronic control, display, and instrumentation solutions for recreational and off-highway vehicles, and stationary and power generation equipment under the Enovation Controls, Murphy, and Zero Off brand names; and digital and analog electronic controller products for the fluid power industry under the HCT brand name. The company sells its hydraulic products primarily through independent fluid power channel partners, as well as directly to original equipment manufacturer customers and other companies in the hydraulics industry; and electronic products to original equipment manufacturer customers. The company was formerly known as Sun Hydraulics Corporation and changed its name to Helios Technologies in August 2018. Helios Technologies 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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