Avnet (NYSE:AVT) vs. Flextronics International (FLEX) Head-To-Head Review

Flextronics International (NASDAQ: FLEX) and Avnet (NYSE:AVT) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Profitability

This table compares Flextronics International and Avnet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flextronics International 2.25% 22.71% 4.81%
Avnet 2.86% 8.20% 3.90%

Dividends

Avnet pays an annual dividend of C$0.72 per share and has a dividend yield of 1.8%. Flextronics International does not pay a dividend. Avnet pays out 18.0% of its earnings in the form of a dividend. Flextronics International has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Flextronics International and Avnet, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flextronics International 0 2 7 0 2.78
Avnet 3 6 0 0 1.67

Flextronics International presently has a consensus target price of $19.50, indicating a potential upside of 6.15%. Avnet has a consensus target price of C$39.50, indicating a potential downside of 0.15%. Given Flextronics International’s stronger consensus rating and higher possible upside, analysts plainly believe Flextronics International is more favorable than Avnet.

Earnings & Valuation

This table compares Flextronics International and Avnet’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Flextronics International $23.86 billion 0.41 $319.56 million $1.01 18.19
Avnet $17.44 billion 0.27 $525.27 million C$4.01 9.87

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

Institutional and Insider Ownership

95.3% of Flextronics International shares are owned by institutional investors. Comparatively, 93.4% of Avnet shares are owned by institutional investors. 0.8% of Flextronics International shares are owned by company insiders. Comparatively, 1.7% of Avnet shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Flextronics International has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Avnet has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Summary

Flextronics International beats Avnet on 11 of the 17 factors compared between the two stocks.

About Flextronics International

Flex Ltd, formerly Flextronics International Ltd. provides design, engineering, manufacturing, and supply chain services and solutions. The Company designs, builds, ships and services packaged consumer electronics and industrial products for original equipment manufacturers (OEMs). Its segments include High Reliability Solutions (HRS), Consumer Technologies Group (CTG), Industrial and Emerging Industries (IEI) and Communications & Enterprise Compute (CEC). The HRS segment consists of its medical business, automotive business, and defense and aerospace businesses. The CTG segment includes its mobile devices business, consumer electronics business and high-volume computing business. The IEI segment consists of semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks, energy and metering, and lighting. The CEC segment includes radio access base stations, remote radio heads, and small cells for wireless infrastructure.

About Avnet

Avnet, Inc. is a distributor of electronic components, enterprise computer, networking and storage products and software, and embedded subsystems. The Company operates through Electronics Marketing (EM) segment. The EM segment markets and sells semiconductors; interconnect, passive and electromechanical devices (IP&E), and embedded products to a customer base serving various end markets. The Company creates a link in the technology supply chain that connects electronic component and computer product manufacturers and software developers with a customer base of original equipment manufacturers (OEMs), electronic manufacturing services (EMS) providers, original design manufacturers (ODMs), systems integrators (SIs), independent software vendors (ISVs) and value-added resellers (VARs). The Company distributes electronic components, computer products and software, as received from its suppliers or through a customized solution, and offers assembly and other services.

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