Contrasting CTS (NYSE:CTS) & nVent Electric (NYSE:NVT)

nVent Electric (NYSE:NVT) and CTS (NYSE:CTS) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Insider & Institutional Ownership

90.1% of nVent Electric shares are owned by institutional investors. Comparatively, 96.9% of CTS shares are owned by institutional investors. 1.7% of nVent Electric shares are owned by insiders. Comparatively, 2.4% of CTS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

nVent Electric has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, CTS has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Dividends

nVent Electric pays an annual dividend of $0.84 per share and has a dividend yield of 0.5%. CTS pays an annual dividend of $0.16 per share and has a dividend yield of 0.3%. nVent Electric pays out 27.9% of its earnings in the form of a dividend. CTS pays out 6.8% 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. nVent Electric has raised its dividend for 2 consecutive years. nVent Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations for nVent Electric and CTS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
nVent Electric	0	1	11	1	3.00
CTS	0	1	0	1	3.00

nVent Electric currently has a consensus price target of $184.20, indicating a potential upside of 13.15%. Given nVent Electric’s higher probable upside, analysts clearly believe nVent Electric is more favorable than CTS.

Earnings & Valuation

This table compares nVent Electric and CTS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
nVent Electric	$4.33 billion	6.09	$710.20 million	$3.01	54.08
CTS	$554.78 million	3.23	$65.32 million	$2.34	26.78

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
nVent Electric	11.37%	16.82%	9.03%
CTS	12.46%	12.90%	9.13%

Summary

nVent Electric beats CTS on 11 of the 16 factors compared between the two stocks.

About nVent Electric

nVent Electric plc, together with its subsidiaries, designs, manufactures, markets, installs, and services electrical connection and protection solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company operates through three segments: Enclosures, Electrical & Fastening Solutions, and Thermal Management. The Enclosures segment provides solutions to protect electronics and data in mission critical applications, including data solutions. This segment also offers digital and automation solutions, system integrations, and global services. The Electrical & Fastening Solutions segment provides solutions that connect and protect power and data infrastructure. This segment also offers power connections, fastening solutions, cable management solutions, grounding and bonding systems, and tools and test instruments. The Thermal Management segment offers heat management solutions that protect people and assets. This segment includes heat tracing for freeze protection and process temperature maintenance and control; pipe freeze protection, surface deicing, hot water temperature maintenance, floor heating, fire-rated wiring, and leak detection; and heat trace systems, connected controls, remote monitoring, and annual service programs. The company markets its products through electrical distributors, contractors, and original equipment manufacturers under the CADDY, ERICO, GARDNER BENDER, HOFFMAN, ILSCO, RAYCHEM, SCHROFF, and TRACER brand names. Its products are used for various applications, such as industrial, commercial and residential, infrastructure, and energy. nVent Electric plc was founded in 1903 and is based in London, the United Kingdom.

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.