Head to Head Review: Transcat (NASDAQ:TRNS) vs. Diploma (OTCMKTS:DPLMF)

Diploma (OTCMKTS:DPLMF) and Transcat (NASDAQ:TRNS) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Diploma and Transcat, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diploma	0	0	0	0	N/A
Transcat	0	2	3	0	2.60

Transcat has a consensus price target of $151.33, suggesting a potential upside of 15.89%. Given Transcat’s higher possible upside, analysts plainly believe Transcat is more favorable than Diploma.

Profitability

This table compares Diploma and Transcat’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diploma	N/A	N/A	N/A
Transcat	5.69%	8.48%	6.28%

Valuation and Earnings

This table compares Diploma and Transcat”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diploma	N/A	N/A	N/A	N/A	N/A
Transcat	$259.48 million	4.60	$13.65 million	$1.69	77.27

Transcat has higher revenue and earnings than Diploma.

Insider and Institutional Ownership

98.3% of Transcat shares are held by institutional investors. 2.3% of Transcat shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Transcat beats Diploma on 8 of the 8 factors compared between the two stocks.

About Diploma

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, Continental Europe, North America, and internationally. It operates through three business sectors: Life Sciences, Seals, and Controls. The Life Sciences sector supplies technology-enabled products used in surgical procedures in operating theatres and endoscopy; testing equipment and services for clinical laboratories; and bio-pharma, food safety and testing, and other research-oriented products. It serves hospitals, clinical laboratories, and research facilities. The Seals sector supplies various seals, gaskets, cylinders, components, and kits used in heavy mobile machinery; and O-rings, fittings, hydraulic and industrial hoses, pneumatics products, pumps, and related accessories. The Controls sector offers wire and cabling, interconnect, specialty fasteners, and adhesive and industrial automation solutions for various applications. Diploma PLC was incorporated in 1999 and is based in London, the United Kingdom.

About Transcat

Transcat, Inc. provides calibration and laboratory instrument services in the United States, Canada, and internationally. It operates through two segments: Service and Distribution. The Service segment offers calibration, repair, inspection, analytical qualification, preventative maintenance, consulting, and other related services. This segment also provides CalTrak, a proprietary document and asset management system that is used to manage the workflow of its calibration service centers and customers’ assets; and Compliance, Control and Cost, an online customer portal that provides its customers with web-based asset management capability, as well as a safe and secure off-site archive of calibration and other service records. The Distribution segment sells and rents test, measurement, and control instruments for customers’ test and measurement instrumentation needs, as well as value added services, such as calibration/certification of equipment purchase, equipment rental, used equipment for sale, and equipment kitting. This segment markets and sells its products through website, digital and print advertising, proactive outbound sales, and an inbound call center. The company provides services and products to highly regulated industries, principally life science, which includes companies in the pharmaceutical, biotechnology, medical device, and other FDA-regulated industries; and additional industries, including aerospace and defense industrial manufacturing, energy and utilities, and other industries that require accuracy in processes and confirmation of the capabilities of their equipment. Transcat, Inc. was incorporated in 1964 and is headquartered in Rochester, New York.