Reviewing Sanmina (SANM) & CTS (CTS)

Sanmina (NASDAQ: SANM) and CTS (NYSE:CTS) 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 valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

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This is a summary of current recommendations and price targets for Sanmina and CTS, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sanmina 0 3 3 0 2.50
CTS 0 0 0 0 N/A

Sanmina currently has a consensus target price of $37.25, suggesting a potential upside of 30.02%. Given Sanmina’s higher possible upside, analysts plainly believe Sanmina is more favorable than CTS.

Valuation and Earnings

This table compares Sanmina and CTS’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sanmina $6.87 billion 0.30 $138.83 million $2.87 9.98
CTS $422.99 million 2.29 $14.44 million $1.23 23.94

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

Dividends

CTS pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Sanmina does not pay a dividend. CTS pays out 13.0% of its earnings in the form of a dividend.

Risk & Volatility

Sanmina has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, CTS has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Institutional & Insider Ownership

93.6% of Sanmina shares are held by institutional investors. Comparatively, 95.9% of CTS shares are held by institutional investors. 5.1% of Sanmina shares are held by company insiders. Comparatively, 1.8% of CTS 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.

Profitability

This table compares Sanmina and CTS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sanmina -0.88% 11.61% 5.07%
CTS 3.42% 12.16% 7.66%

Summary

CTS beats Sanmina on 8 of the 15 factors compared between the two stocks.

Sanmina Company Profile

Sanmina Corporation is a provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. The Company provides its offerings primarily to original equipment manufacturers (OEMs) in various industries, including communications networks, storage, industrial, defense and aerospace, medical and energy. The Company operates through two businesses: Integrated Manufacturing Solutions (IMS) and Components, Products and Services (CPS). IMS consists of printed circuit board assembly and test, final system assembly and test, and direct-order-fulfillment. Its Components include interconnect systems and mechanical systems. Its Products include memory, radio frequency (RF), optical and microelectronics solutions, defense and aerospace products, storage solutions and cloud-based manufacturing execution software. Its Services include design, engineering, logistics and repair services.

CTS Company Profile

CTS Corporation designs, manufactures, and sells a range of sensors, electronic components, and actuators primarily to original equipment manufacturers for the aerospace, defense, communications, industrial, information technology, medical, and transportation markets. The company offers sensors and actuators used in passenger or consumer vehicles; electronic components used in communications infrastructure, information technology and other high-speed applications, switches, and potentiometers supplied to various markets; and fabricated piezoelectric materials and substrates used primarily in medical, industrial, defense and aerospace, and information technology markets. It markets its products through its sales engineers, independent manufacturers' representatives, and distributors in China, Denmark, Germany, India, Japan, Scotland, Singapore, Taiwan, the United States, the Czech Republic, and internationally. The company was founded in 1896 and is based in Lisle, Illinois.

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