Head to Head Analysis: CTS (NYSE:CTS) & AUO (OTCMKTS:AUOTY)

CTS (NYSE:CTS) and AUO (OTCMKTS:AUOTY) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Analyst Ratings

This is a summary of recent ratings and recommmendations for CTS and AUO, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CTS	0	1	0	0	2.00
AUO	0	0	0	0	0.00

Dividends

CTS pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. AUO pays an annual dividend of $0.30 per share and has a dividend yield of 8.3%. CTS pays out 8.1% of its earnings in the form of a dividend. AUO pays out 115.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CTS	11.14%	11.92%	8.31%
AUO	N/A	N/A	N/A

Volatility and Risk

CTS has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, AUO has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

96.9% of CTS shares are held by institutional investors. 1.6% of CTS shares are held by insiders. Comparatively, 16.0% of AUO shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares CTS and AUO”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CTS	$531.52 million	2.29	$58.11 million	$1.97	21.22
AUO	$8.03 billion	0.35	-$584.71 million	$0.26	13.85

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

Summary

CTS beats AUO on 11 of the 14 factors compared between the two stocks.

About CTS

CTS Corporation manufactures and sells sensors, actuators, and connectivity components in North America, Europe, and Asia. The company provides encoders, rotary position sensors, slide potentiometers, industrial and commercial rotary potentiometers. It also provides non-contacting, and contacting pedals; and eBrake pedals. In addition, the company offers flow meters, hydrophones, non-destructive testing, sonar, ultrasonic imaging, piezoelectric materials, piezoelectric sense products, and bulk products. Further, it provides eMobility, chassis, current sensors, clutch, brake, position sensors, stroke sensor, seating, speed, throttle, transmission, turbo, temperature sensors, and technical related products. Additionally, the company offers DIP, rotary selector, tactile, rotary DIP, and toggle switches, as well as provides transducer related products. Furthermore, it provides EMI, RFI, and RFI products; specialty and resistors; and frequency control products. The company sells and markets its products through its sales engineers, independent manufacturer representatives, and distributors. CTS Corporation was founded in 1896 and is based in Lisle, Illinois.

About AUO

AUO Corporation researches, develops, produces, and sells thin film transistor liquid crystal displays (TFT-LCDs) and other flat panel displays for various applications. It operates through two segments, Display and Energy. The company designs, manufactures, and sells ingots, solar wafers, and solar modules, as well as provides technical engineering and maintenance services for solar system projects. It also sells and leases content management system and related hardware; designs digital signage content and field curation solutions; plans, designs, and develops construction project for environmental protection and related project management; and designs, manufactures, and sells TFT-LCD modules, TV sets and related parts, backlight modules, automotive parts, and precision plastic parts. In addition, the company engages in the development, manufacturing, and sale of medical equipment; services related to site rental and educational activities; research and development, and IP related business; solar power generation; and sale and sales support of TFTLCD panels. Further, it designs, develops, and sells software and hardware for health care industry; provides software and hardware integration system and equipment relating to intelligent manufacturing, as well as software development and related consulting services; and investment services. It operates in the People's Republic of China, Taiwan, the United States, Japan, Singapore, and internationally. The company was formerly known as AU Optronics Corp. and changed its name to AUO Corporation in June 2022. AUO Corporation was founded in 1996 and is headquartered in Hsinchu City, Taiwan.