Littelfuse (LFUS) & ABB Group (ABB) Critical Review

Littelfuse (NASDAQ: LFUS) and ABB Group (NYSE:ABB) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Dividends

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Littelfuse pays an annual dividend of $1.48 per share and has a dividend yield of 0.7%. ABB Group pays an annual dividend of $0.52 per share and has a dividend yield of 2.3%. Littelfuse pays out 19.1% of its earnings in the form of a dividend. ABB Group pays out 41.6% 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. ABB Group has raised its dividend for 6 consecutive years. ABB Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Littelfuse has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, ABB Group has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Valuation & Earnings

This table compares Littelfuse and ABB Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Littelfuse $1.22 billion 4.05 $119.51 million $7.74 25.66
ABB Group $34.31 billion 1.39 $2.21 billion $1.25 17.86

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

Profitability

This table compares Littelfuse and ABB Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Littelfuse 9.78% 19.65% 10.74%
ABB Group 6.45% 18.11% 6.41%

Insider & Institutional Ownership

94.3% of Littelfuse shares are owned by institutional investors. Comparatively, 5.5% of ABB Group shares are owned by institutional investors. 3.8% of Littelfuse shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Littelfuse and ABB Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Littelfuse 0 3 1 0 2.25
ABB Group 2 6 2 0 2.00

Littelfuse currently has a consensus target price of $205.00, suggesting a potential upside of 3.21%. ABB Group has a consensus target price of $25.00, suggesting a potential upside of 12.01%. Given ABB Group’s higher possible upside, analysts clearly believe ABB Group is more favorable than Littelfuse.

Summary

Littelfuse beats ABB Group on 10 of the 17 factors compared between the two stocks.

Littelfuse Company Profile

Littelfuse, Inc. is a supplier of circuit protection products for the electronics, automotive and industrial markets. The Company operates through three segments. The Electronics segment provides circuit protection components for overcurrent and overvoltage protection, as well as sensor components and modules to manufacturers of a range of electronic products. The Automotive segment provides circuit protection and sensor products to the worldwide automotive original equipment manufacturers (OEM) and parts distributors of passenger automobiles, trucks, buses, and off-road equipment. The Industrial Segment provides circuit protection products for industrial and commercial customers. The Company also offers electronic reed switches and sensors, automotive sensors for comfort and safety systems and a range of electromechanical and electronic switch and control devices for commercial and specialty vehicles.

ABB Group Company Profile

ABB Ltd manufactures and sells electrification, robotics and motion, industrial automation, and power grid products worldwide. Its Electrification Products segment provides modular substation packages, distribution automation products, circuit breakers, measuring and sensing devices, control products, wiring accessories, enclosures and cabling systems, and intelligent home and building solutions. This segment serves building, data center, rail, wind and solar, food and beverage, marine, and oil and gas industries. The company's Robotics and Motion segment offers robotics, motors, generators, drives, wind converters, components and systems for railways and related services, and digital services for applications in industries, transportation and infrastructure, and utilities. This segment serves machinery manufacturers, process industries, hybrid and batch manufacturers, transportation equipment manufacturers, discrete manufacturing companies, utilities, and customers in the automotive industry. Its Industrial Automation segment provides process and discrete control solutions, advanced process control software and manufacturing execution systems, sensing, measurement and analytical instrumentation and solutions, electric ship propulsion systems, machine and factory automation solutions, and turbochargers, as well as remote monitoring, preventive maintenance, and cybersecurity services. This segment serves companies in the oil and gas, minerals and mining, metals, pulp and paper, chemicals and pharmaceuticals, food and beverage, power generation, and marine industries. The company's Power Grids segment offers turnkey grid integration, transmission systems, and substation solutions; transformers; and circuit breakers, switchgear, and capacitors. This segment serves transmission and distribution operators and owners, as well as utilities and industrial, transportation, and infrastructure customers. ABB Ltd was founded in 1883 and is headquartered in Zurich, Switzerland.

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