Analyzing TE Connectivity (TEL) and The Competition

TE Connectivity (NYSE:TEL) is one of 377 publicly-traded companies in the “Electronic Equipment, Instruments & Components” industry, but how does it compare to its peers? We will compare TE Connectivity to similar businesses based on the strength of its profitability, valuation, earnings, risk, dividends, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of current ratings for TE Connectivity and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TE Connectivity	1	5	11	0	2.59
TE Connectivity Competitors	2049	7614	10449	665	2.47

TE Connectivity currently has a consensus target price of $255.50, indicating a potential upside of 23.08%. As a group, “Electronic Equipment, Instruments & Components” companies have a potential upside of 41.38%. Given TE Connectivity’s peers higher probable upside, analysts clearly believe TE Connectivity has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares TE Connectivity and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
TE Connectivity	$19.89 billion	$3.25 billion	18.75
TE Connectivity Competitors	$4.00 billion	$172.92 million	4.89

TE Connectivity has higher revenue and earnings than its peers. TE Connectivity is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

TE Connectivity has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, TE Connectivity’s peers have a beta of -0.18, suggesting that their average share price is 118% less volatile than the S&P 500.

Insider and Institutional Ownership

91.4% of TE Connectivity shares are owned by institutional investors. Comparatively, 43.2% of shares of all “Electronic Equipment, Instruments & Components” companies are owned by institutional investors. 0.6% of TE Connectivity shares are owned by company insiders. Comparatively, 16.4% of shares of all “Electronic Equipment, Instruments & Components” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares TE Connectivity and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TE Connectivity	16.36%	25.55%	13.03%
TE Connectivity Competitors	-158.14%	-25.87%	-6.85%

Dividends

TE Connectivity pays an annual dividend of $3.12 per share and has a dividend yield of 1.5%. TE Connectivity pays out 28.2% of its earnings in the form of a dividend. As a group, “Electronic Equipment, Instruments & Components” companies pay a dividend yield of 2.0% and pay out 69.0% of their earnings in the form of a dividend. TE Connectivity has increased its dividend for 12 consecutive years.

Summary

TE Connectivity beats its peers on 11 of the 15 factors compared.

TE Connectivity Company Profile

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the AsiaPacific, and the Americas. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas, and application tooling products for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; and interventional medical components, relays, heat shrink tubing, and wires and cables for industrial equipment, aerospace, defense, marine, medical, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, relays, heat shrink tubing, and antennas for the data and devices, and appliances markets. The company sells its products to approximately 140 countries primarily through direct sales to manufacturers, as well as through third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was founded in 1941 and is based in Schaffhausen, Switzerland.