Amphenol (APH) vs. Methode Electronics (MEI) Financial Analysis

Amphenol (NYSE: APH) and Methode Electronics (NYSE:MEI) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Earnings & Valuation

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This table compares Amphenol and Methode Electronics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amphenol $7.01 billion 3.78 $650.50 million $3.12 27.83
Methode Electronics $816.50 million 1.81 $92.90 million $2.55 15.69

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

Dividends

Amphenol pays an annual dividend of $0.76 per share and has a dividend yield of 0.9%. Methode Electronics pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. Amphenol pays out 24.4% of its earnings in the form of a dividend. Methode Electronics pays out 17.3% 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. Amphenol has raised its dividend for 6 consecutive years. Methode Electronics is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

96.5% of Amphenol shares are held by institutional investors. Comparatively, 96.0% of Methode Electronics shares are held by institutional investors. 2.5% of Amphenol shares are held by insiders. Comparatively, 4.4% of Methode Electronics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Amphenol has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Methode Electronics has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares Amphenol and Methode Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amphenol 9.28% 26.09% 11.01%
Methode Electronics 4.95% 17.84% 12.51%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Amphenol and Methode Electronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amphenol 0 5 4 1 2.60
Methode Electronics 0 0 3 0 3.00

Amphenol currently has a consensus price target of $90.75, suggesting a potential upside of 4.53%. Methode Electronics has a consensus price target of $49.67, suggesting a potential upside of 24.17%. Given Methode Electronics’ stronger consensus rating and higher possible upside, analysts plainly believe Methode Electronics is more favorable than Amphenol.

Summary

Amphenol beats Methode Electronics on 11 of the 18 factors compared between the two stocks.

About Amphenol

Amphenol Corporation, together with its subsidiaries, engages in the design, manufacture, and marketing of electrical, electronic, and fiber optic connectors worldwide. It operates through two segments, Interconnect Products and Assemblies, and Cable Products and Solutions. The Interconnect Products and Assemblies segment offers connector and connector systems, including fiber optic, harsh environment, high-speed, and radio frequency interconnect products, as well as antennas; power interconnect products, bus bars, and distribution systems; and other connectors. It also provides value-add products, such as backplane interconnect systems, cable assemblies and harnesses, and cable management products; and other products comprising antennas, flexible and rigid printed circuit boards, hinges, molded parts, production-related products, sensors and sensor-based products, and switches. The Cable Products and Solutions segment offers coaxial, power, and specialty cables; cable assemblies; and components comprising combiner/splitter products, connector and connector systems, and fiber optic components. The company sells its products through its sales force, independent representatives, and a network of electronics distributors to original equipment manufacturers, electronic manufacturing services companies, original design manufacturers, and communication network operators in the automotive, broadband communication, commercial aerospace, industrial, information technology and data communication, military, mobile device, and mobile network markets. Amphenol Corporation was founded in 1932 and is headquartered in Wallingford, Connecticut.

About Methode Electronics

Methode Electronics, Inc. designs, manufactures, and markets component and subsystem devices worldwide. The company operates through four segments: Automotive, Interface, Power Products, and Other. The Automotive segment offers electronic and electro-mechanical devices, and related products to automobile original equipment manufacturers directly or through their tiered suppliers. Its products include integrated center consoles, hidden switches, ergonomic switches, transmission lead frames, and sensors, which incorporate magneto-elastic sensing and other technologies that monitor the operation or status of a component or system. The Interface segment provides various copper and fiber-optic interface and interface solutions for the aerospace, appliance, commercial food service, construction, consumer, material handling, medical, military, mining, point-of-sale, and telecommunication markets. Its solutions consist of conductive polymers, industrial safety radio remote controls, optical and copper transceivers, and solid-state field-effect consumer touch panels; and services include the design and installation of fiber optic and copper infrastructure systems, and manufacturing active and passive optical components. The Power Products segment manufactures braided flexible cables, current-carrying laminated bus bars and devices, custom power-product assemblies, high-current low voltage flexible power cabling systems, and powder coated bus bars that are used in aerospace, computer, industrial and power conversion, military, telecommunication, and transportation markets and applications. The Other segment offers medical devices, inverters and battery systems, and insulated gate bipolar transistor solutions. Methode Electronics, Inc. was founded in 1946 and is headquartered in Chicago, Illinois.

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