Financial Review: Sun Hydraulics Corporation (NASDAQ:SNHY) versus Ichor Holdings (ICHR)

Sun Hydraulics Corporation (NASDAQ: SNHY) and Ichor Holdings (NASDAQ:ICHR) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitabiliy, valuation and dividends.

Institutional & Insider Ownership

80.4% of Sun Hydraulics Corporation shares are owned by institutional investors. Comparatively, 87.8% of Ichor Holdings shares are owned by institutional investors. 10.7% of Sun Hydraulics Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Sun Hydraulics Corporation pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Ichor Holdings does not pay a dividend. Sun Hydraulics Corporation pays out 37.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Sun Hydraulics Corporation and Ichor Holdings, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sun Hydraulics Corporation	0	0	1	0	3.00
Ichor Holdings	0	0	5	0	3.00

Sun Hydraulics Corporation currently has a consensus price target of $35.00, suggesting a potential downside of 15.64%. Ichor Holdings has a consensus price target of $25.20, suggesting a potential upside of 9.42%. Given Ichor Holdings’ higher possible upside, analysts plainly believe Ichor Holdings is more favorable than Sun Hydraulics Corporation.

Valuation & Earnings

This table compares Sun Hydraulics Corporation and Ichor Holdings’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Sun Hydraulics Corporation	$227.26 million	4.94	$55.55 million	$0.95	43.67
Ichor Holdings	$481.16 million	1.19	$44.75 million	N/A	N/A

Sun Hydraulics Corporation has higher revenue, but lower earnings than Ichor Holdings.

Profitability

This table compares Sun Hydraulics Corporation and Ichor Holdings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sun Hydraulics Corporation	11.14%	10.57%	7.17%
Ichor Holdings	N/A	N/A	N/A

Summary

Sun Hydraulics Corporation beats Ichor Holdings on 7 of the 12 factors compared between the two stocks.

Sun Hydraulics Corporation Company Profile

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.

Ichor Holdings Company Profile

Ichor Holdings, Ltd. is engaged in the design, engineering and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment. The Company’s primary offerings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process tools used in the manufacturing of semiconductor devices. The Company’s gas delivery subsystems deliver, monitor and control precise quantities of the specialized gases used in semiconductor manufacturing processes, such as etch and deposition. Its chemical delivery subsystems precisely blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes, such as chemical-mechanical planarization (CMP) electroplating and cleaning. The Company also manufactures certain components for internal use in fluid delivery systems and for direct sales to its customers.