CTS Corporation (NYSE: CTS) and Methode Electronics (NYSE:MEI) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.
This is a breakdown of current ratings and recommmendations for CTS Corporation and Methode Electronics, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
CTS Corporation currently has a consensus price target of $24.50, suggesting a potential upside of 10.61%. Methode Electronics has a consensus price target of $45.50, suggesting a potential upside of 20.85%. Given Methode Electronics’ stronger consensus rating and higher probable upside, analysts clearly believe Methode Electronics is more favorable than CTS Corporation.
Volatility and Risk
CTS Corporation has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Methode Electronics has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.
Valuation & Earnings
This table compares CTS Corporation and Methode Electronics’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|CTS Corporation||$407.12 million||1.79||$76.03 million||$0.91||24.34|
|Methode Electronics||$816.50 million||1.70||$149.90 million||$2.48||15.18|
Methode Electronics has higher revenue and earnings than CTS Corporation. Methode Electronics is trading at a lower price-to-earnings ratio than CTS Corporation, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
92.3% of CTS Corporation shares are owned by institutional investors. Comparatively, 89.4% of Methode Electronics shares are owned by institutional investors. 1.7% of CTS Corporation shares are owned by company insiders. Comparatively, 4.4% of Methode Electronics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
CTS Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. Methode Electronics pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. CTS Corporation pays out 17.6% of its earnings in the form of a dividend. Methode Electronics pays out 14.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CTS Corporation has raised its dividend for 3 consecutive years. Methode Electronics is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares CTS Corporation and Methode Electronics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Methode Electronics beats CTS Corporation on 12 of the 17 factors compared between the two stocks.
CTS Corporation Company Profile
CTS Corporation is a manufacturer of sensors, electronic components and actuators. The Company designs, manufactures and sells a line of sensors, electronic components and actuators primarily to original equipment manufacturers (OEMs) for the transportation, industrial, medical, information technology, defense and aerospace, and communications markets. It operates manufacturing facilities in North America, Asia and Europe. Its products perform specific electronic functions for a given product family and are intended for use in customer assemblies. The Company’s products consist principally of sensors and actuators used in passenger or commercial vehicles; electronic components used in communications infrastructure, information technology and other high-speed applications; switches and potentiometers supplied to multiple markets, and fabricated piezoelectric materials and substrates used primarily in medical, industrial, defense and aerospace, and information technology markets.
Methode Electronics Company Profile
Methode Electronics, Inc. (Methode) is a manufacturer of component and subsystem devices. The Company designs, manufactures and markets devices employing electrical, radio remote control, electronic, wireless and sensing technologies. The Company operates through segments, including Automotive, Interface, Power Products and Other. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile original equipment manufacturers (OEMs). The Interface segment provides a range of copper and fiber-optic interface and interface solutions. The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, such as PowerRail solution, high-current low voltage flexible power cabling systems and powder coated bus bars. The Other segment includes medical devices, inverters and battery systems, and insulated gate bipolar transistor solutions.
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