Head-To-Head Survey: TE Connectivity (NYSE:TEL) and Avnet (NASDAQ:AVT)

TE Connectivity (NYSE:TEL) and Avnet (NASDAQ:AVT) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Earnings and Valuation

This table compares TE Connectivity and Avnet’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TE Connectivity $12.17 billion 3.52 -$241.00 million $4.26 30.40
Avnet $17.63 billion 0.24 -$31.08 million $1.54 27.91

Avnet has higher revenue and earnings than TE Connectivity. Avnet is trading at a lower price-to-earnings ratio than TE Connectivity, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

91.4% of TE Connectivity shares are held by institutional investors. Comparatively, 93.8% of Avnet shares are held by institutional investors. 0.8% of TE Connectivity shares are held by company insiders. Comparatively, 1.1% of Avnet shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for TE Connectivity and Avnet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TE Connectivity 0 3 9 0 2.75
Avnet 1 3 1 1 2.33

TE Connectivity presently has a consensus price target of $115.33, indicating a potential downside of 10.94%. Avnet has a consensus price target of $34.33, indicating a potential downside of 20.12%. Given TE Connectivity’s stronger consensus rating and higher possible upside, analysts clearly believe TE Connectivity is more favorable than Avnet.

Profitability

This table compares TE Connectivity and Avnet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TE Connectivity -1.98% 14.86% 7.37%
Avnet -0.52% 3.40% 1.55%

Risk & Volatility

TE Connectivity has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, Avnet has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500.

Dividends

TE Connectivity pays an annual dividend of $1.92 per share and has a dividend yield of 1.5%. Avnet pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. TE Connectivity pays out 45.1% of its earnings in the form of a dividend. Avnet pays out 54.5% 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. TE Connectivity has increased its dividend for 1 consecutive years and Avnet has increased its dividend for 1 consecutive years.

Summary

Avnet beats TE Connectivity on 9 of the 17 factors compared between the two stocks.

About TE Connectivity

TE Connectivity Ltd. engages in the design and manufacture of connectivity and sensors solutions. It operates through the following segments: Transportation, Industrial, and Communications Solutions. The Transportation Solutions segment offers products that are used in the automotive, commercial transportation, and sensors markets. The Industrial Solutions segment provides products that connect and distribute power, data, and signal. The Communications Solutions segment supplies electronic components for the data and devices and appliances markets. The company was founded in 2000 and is headquartered in Schaffhausen, Switzerland.

About Avnet

Avnet, Inc., a technology solutions company, markets, sells, and distributes electronic components. The company operates through two segments, Electronic Components and Farnell. The Electronic Components segment markets, sells, and distributes semiconductors; interconnect, passive, and electromechanical devices; and other integrated components from electronic component manufacturers. It also offers design chain support that provides engineers with technical design solutions; engineering and technical resources to support product design, bill of materials development, and technical education and training; and supply chain solutions that provide support and logistical services to original equipment manufacturers, electronic manufacturing service providers, and electronic component manufacturers. In addition, this segment provides integrated solutions, such as technical design, integration, and assembly of embedded products, and systems and solutions primarily for industrial applications, as well as for intelligent embedded and innovative display solutions comprising touch and passive displays. Further, it develops and manufactures standard board and industrial subsystems, and application-specific devices that enable it to produce systems tailored to specific customer requirements. This segment serves various markets, including automotive, medical, defense, aerospace, telecommunications, industrial, and digital editing. The Farnell segment distributes kits, tools, and electronic and industrial automation components, as well as test and measurement products to engineers and entrepreneurs. It has operations in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Avnet, Inc. was founded in 1921 and is headquartered in Phoenix, Arizona.

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