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Head to Head Review: Electro Scientific Industries (NASDAQ:ESIO) vs. Methode Electronics (MEI)

Electro Scientific Industries (NASDAQ: ESIO) and Methode Electronics (NYSE:MEI) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitabiliy, valuation and dividends. Institutional and Insider Ownership

71.9% of Electro Scientific Industries shares are held by institutional investors.

Comparatively, 89.4% of Methode Electronics shares are held by institutional investors.

6.2% of Electro Scientific Industries shares are held by company insiders. Comparatively, 4.4% of Methode Electronics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Electro Scientific Industries and Methode Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Electro Scientific Industries -18.49% -22.18% -15.53%
Methode Electronics 11.38% 18.81% 14.16%

Dividends Methode Electronics pays an annual dividend of £0.36 per share and has a dividend yield of 0.9%. Electro Scientific Industries does not pay a dividend.

Methode Electronics pays out 14.5% of its earnings in the form of a dividend. Risk & Volatility Electro Scientific Industries has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Comparatively, Methode Electronics has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Earnings & Valuation This table compares Electro Scientific Industries and Methode Electronics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Electro Scientific Industries £186.04 million 1.93 -£4.28 million (£1.05) -10.13
Methode Electronics £816.50 million 1.76 £149.90 million £2.48 15.73

Methode Electronics has higher revenue and earnings than Electro Scientific Industries.

Electro Scientific Industries is trading at a lower price-to-earnings ratio than Methode Electronics, indicating that it is currently the more affordable of the two stocks. Analyst Recommendations This is a summary of current ratings and target prices for Electro Scientific Industries and Methode Electronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Electro Scientific Industries 0 0 2 0 3.00
Methode Electronics 0 1 3 0 2.75

Electro Scientific Industries currently has a consensus target price of £10.50, suggesting a potential downside of 1.32%.

Methode Electronics has a consensus target price of £45.50, suggesting a potential upside of 16.67%. Given Methode Electronics’ higher probable upside, analysts plainly believe Methode Electronics is more favorable than Electro Scientific Industries. Summary

Methode Electronics beats Electro Scientific Industries on 11 of the 15 factors compared between the two stocks. About Electro Scientific Industries Electro Scientific Industries logoElectro Scientific Industries, Inc. and its subsidiaries supply laser-based manufacturing solutions for industries reliant on microtechnologies.

The Company operates through two segments: Component Processing and Micromachining. The Component Processing segment includes interconnect products, semiconductor products and component products. The interconnect, semiconductor and component products are sold to manufacturers of electronic components and are used to drill, cut, trim, ablate and test and mark features for the functionality of the component.

The Micromachining segment includes products that are sold to manufacturers of end devices across various industries and are used to drill, cut or mark features on a range of materials, generally on the casing or external surface of the end device. Its integrated solutions allow industrial designers and process engineers to control the power of laser light to transform materials. It has operations in Asia, Europe and North America.

About Methode Electronics Methode Electronics logoMethode Electronics, Inc. (Methode) is a manufacturer of component and subsystem devices. The Company designs, manufactures and markets devices employing electrical, radio remote control, electronic, wireless and sensing technologies.

The Company operates through segments, including Automotive, Interface, Power Products and Other. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile original equipment manufacturers (OEMs). The Interface segment provides a range of copper and fiber-optic interface and interface solutions.

The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, such as PowerRail solution, high-current low voltage flexible power cabling systems and powder coated bus bars.

The Other segment includes medical devices, inverters and battery systems, and insulated gate bipolar transistor solutions.

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References

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