Analyzing OmniTek Engineering (OTCMKTS:OMTK) and Meritor (OTCMKTS:MTOR)

OmniTek Engineering (OTCMKTS:OMTK) and Meritor (NYSE:MTOR) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Insider & Institutional Ownership

0.0% of OmniTek Engineering shares are held by institutional investors. Comparatively, 95.0% of Meritor shares are held by institutional investors. 56.0% of OmniTek Engineering shares are held by insiders. Comparatively, 2.8% of Meritor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares OmniTek Engineering and Meritor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OmniTek Engineering -37.34% -288.97% -31.91%
Meritor 5.86% 89.66% 11.41%

Valuation & Earnings

This table compares OmniTek Engineering and Meritor’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OmniTek Engineering $1.29 million 0.67 -$470,000.00 N/A N/A
Meritor $4.18 billion 0.46 $117.00 million $3.03 7.67

Meritor has higher revenue and earnings than OmniTek Engineering.

Volatility and Risk

OmniTek Engineering has a beta of 2.77, indicating that its share price is 177% more volatile than the S&P 500. Comparatively, Meritor has a beta of 2.16, indicating that its share price is 116% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for OmniTek Engineering and Meritor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OmniTek Engineering 0 0 0 0 N/A
Meritor 0 5 2 0 2.29

Meritor has a consensus price target of $25.57, suggesting a potential upside of 10.07%. Given Meritor’s higher possible upside, analysts plainly believe Meritor is more favorable than OmniTek Engineering.

Summary

Meritor beats OmniTek Engineering on 8 of the 11 factors compared between the two stocks.

OmniTek Engineering Company Profile

Omnitek Engineering Corp. engages in the development and sale of proprietary technology to convert diesel engines to an alternative fuel, natural gas engines and complementary products. Its product application includes stationary applications, global transportation industry, which includes light commercial vehicles, minibuses, heavy-duty-trucks, municipal buses, as well as rail and marine applications. The company was founded on May 2001 and is headquartered in Vista, CA.

Meritor Company Profile

Meritor, Inc. designs, develops, manufactures, markets, distributes, sells, services, and supports integrated systems, modules, and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation, and industrial sectors. It operates through two segments, Commercial Truck; and Aftermarket, Industrial and Trailer. The Commercial Truck segment supplies drivetrain systems and components, including axles, drivelines, and braking and suspension systems primarily for medium-and heavy-duty trucks and other applications; and undercarriage products and systems for trailer applications. The Aftermarket, Industrial and Trailer segment supplies axles, brakes, drivelines, suspension parts, and other replacement parts to commercial vehicle and industrial aftermarket customers. It also supplies drivetrain systems and various components, such as axles, drivelines, brakes, and suspension systems for military, construction, bus and coach, fire and emergency, and other applications. The company sells its products under the Meritor, Euclid, Trucktechnic, and Mach brands primarily to OEMs and its parts marketing operations, and dealers, as well as for other independent distributors and service garages in the aftermarket industry in North America, South America, Europe, and the Asia Pacific. The company was formerly known as ArvinMeritor, Inc. and changed its name to Meritor, Inc. in March 2011. Meritor, Inc. was founded in 1921 and is headquartered in Troy, Michigan.

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