Xcerra (XCRA) vs. Fortive (NYSE:FTV) Critical Comparison

Fortive (NYSE: FTV) and Xcerra (NASDAQ:XCRA) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Fortive and Xcerra, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fortive 0 7 6 0 2.46
Xcerra 0 5 0 0 2.00

Fortive presently has a consensus price target of $70.40, indicating a potential downside of 4.49%. Xcerra has a consensus price target of $10.25, indicating a potential upside of 2.09%. Given Xcerra’s higher possible upside, analysts plainly believe Xcerra is more favorable than Fortive.

Dividends

Fortive pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Xcerra does not pay a dividend. Fortive pays out 10.6% of its earnings in the form of a dividend.

Profitability

This table compares Fortive and Xcerra’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fortive 14.39% 31.67% 11.32%
Xcerra 9.30% 14.63% 10.81%

Institutional and Insider Ownership

78.8% of Fortive shares are held by institutional investors. Comparatively, 84.3% of Xcerra shares are held by institutional investors. 12.1% of Fortive shares are held by insiders. Comparatively, 2.6% of Xcerra shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Fortive and Xcerra’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fortive $6.22 billion 4.12 $872.30 million $2.65 27.82
Xcerra $390.77 million 1.41 $22.55 million $0.72 13.94

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

Summary

Fortive beats Xcerra on 12 of the 15 factors compared between the two stocks.

About Fortive

Fortive Corporation is a diversified industrial growth company. The Company designs, develops, manufactures and markets professional and engineered products, software and services for a range of end markets. The Company operates through two segments: Professional Instrumentation and Industrial Technologies. The Company’s brands operate in field instrumentation, transportation, sensing, product realization, automation and specialty, and franchise distribution markets. The Professional Instrumentation segment offers essential products, software and services used to create actionable intelligence by measuring and monitoring a range of physical parameters in industrial applications, including electrical current, radio frequency signals, distance, pressure and temperature. The Industrial Technologies segment offers critical technical equipment, components, software and services for manufacturing, repair and transportation markets around the world.

About Xcerra

Xcerra Corporation is a provider of test and handling capital equipment, interface products, test fixtures and related services to the semiconductor and electronics manufacturing industries. The Company operates through six segments: Semiconductor Test, Semiconductor Handlers, Contactors, PCB Test, Probes/Pins and Fixtures. The Semiconductor Test segment includes operations related to the design, manufacture and sale of automated test equipment for the semiconductor industry that is used to test system-on-a-chip, digital, analog and mixed signal integrated circuits. The Semiconductor Handlers segment includes operations related to the design, manufacture and sale of test handlers used in the testing of integrated circuits. The Contactors segment includes operations related to the design, manufacture and sale of test contactors. The PCB test segment includes operations related to design, manufacture and sale of equipment used in the testing of bare and loaded printed circuit boards.

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