CTS Corporation (NYSE: CTS) and Kemet Corporation (NYSE:KEM) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.
Volatility and Risk
CTS Corporation has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Kemet Corporation has a beta of 3.55, indicating that its share price is 255% more volatile than the S&P 500.
CTS Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. Kemet Corporation does not pay a dividend. CTS Corporation pays out 17.6% of its earnings in the form of a dividend. Kemet Corporation has increased its dividend for 3 consecutive years.
Earnings and Valuation
This table compares CTS Corporation and Kemet Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|CTS Corporation||$407.12 million||1.87||$76.03 million||$0.91||25.38|
|Kemet Corporation||$846.86 million||1.14||$110.10 million||$4.88||4.13|
Kemet Corporation has higher revenue and earnings than CTS Corporation. Kemet Corporation is trading at a lower price-to-earnings ratio than CTS Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for CTS Corporation and Kemet Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
CTS Corporation presently has a consensus target price of $24.50, suggesting a potential upside of 6.06%. Kemet Corporation has a consensus target price of $18.13, suggesting a potential downside of 10.00%. Given CTS Corporation’s higher possible upside, analysts clearly believe CTS Corporation is more favorable than Kemet Corporation.
Institutional & Insider Ownership
93.4% of CTS Corporation shares are held by institutional investors. Comparatively, 67.3% of Kemet Corporation shares are held by institutional investors. 1.8% of CTS Corporation shares are held by company insiders. Comparatively, 3.9% of Kemet Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares CTS Corporation and Kemet Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Kemet Corporation beats CTS Corporation on 11 of the 16 factors compared between the two stocks.
About CTS Corporation
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.
About Kemet Corporation
KEMET Corporation (KEMET) is a manufacturer of passive electronic components. The Company operates in two segments: Solid Capacitors, and Film and Electrolytic. The Solid Capacitors segment primarily produces tantalum, aluminum, polymer and ceramic capacitors. Solid Capacitors also produces tantalum powder used in the production of tantalum capacitors. The Film and Electrolytic Business Group produces film, paper and wet aluminum electrolytic capacitors. It also designs and produces EMI Filters. The Company’s product offerings include surface mount, which are attached directly to the circuit board; leaded capacitors, which are attached to the circuit board using lead wires, and chassis-mount and other pin-through-hole board-mount capacitors, which utilize attachment methods, such as screw terminal and snap-in. The Company sells its products to a range of original equipment manufacturers (OEMs) and electronics manufacturing services (EMS) providers.
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