Rudolph Technologies (RTEC) versus Esterline Technologies (ESL) Critical Review

Rudolph Technologies (NYSE: RTEC) and Esterline Technologies (NYSE:ESL) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Insider and Institutional Ownership

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91.3% of Rudolph Technologies shares are owned by institutional investors. Comparatively, 95.1% of Esterline Technologies shares are owned by institutional investors. 2.0% of Rudolph Technologies shares are owned by insiders. Comparatively, 1.4% of Esterline Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Rudolph Technologies and Esterline Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rudolph Technologies 1 0 5 0 2.67
Esterline Technologies 4 5 0 0 1.56

Rudolph Technologies presently has a consensus price target of $29.80, suggesting a potential upside of 3.83%. Esterline Technologies has a consensus price target of $79.25, suggesting a potential upside of 9.16%. Given Esterline Technologies’ higher possible upside, analysts plainly believe Esterline Technologies is more favorable than Rudolph Technologies.

Risk and Volatility

Rudolph Technologies has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Esterline Technologies has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Valuation & Earnings

This table compares Rudolph Technologies and Esterline Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rudolph Technologies $255.10 million 3.56 $32.90 million $1.04 27.60
Esterline Technologies $2.00 billion 1.08 $111.55 million $4.36 16.65

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

Profitability

This table compares Rudolph Technologies and Esterline Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rudolph Technologies 12.90% 11.08% 9.53%
Esterline Technologies 3.31% 6.91% 3.97%

Summary

Rudolph Technologies beats Esterline Technologies on 8 of the 14 factors compared between the two stocks.

Rudolph Technologies Company Profile

Rudolph Technologies, Inc. (Rudolph) is engaged in the design, development, manufacture and support of process control defect inspection and metrology, advanced packaging lithography, and data analysis systems and software used by microelectronics device manufacturers. The Company provides process and yield management solutions used in both wafer processing and final manufacturing through a family of standalone systems for macro-defect inspection, lithography, probe card test and analysis, and transparent and opaque thin film measurements. It offers Process Control Business, Lithography Business and Integrated Software Solutions. Rudolph markets and sells products to logic, memory, data storage, flat panel, application-specific integrated circuit (ASIC) device and packaging manufacturers. Its products include AMX 6000 Series, Explorer Inspection Platform, MetaPULSE System, Wafer Scanner Inspection System, GateWay Software, Yield Optimizer Software and Process Sentinel Software.

Esterline Technologies Company Profile

Esterline Technologies Corporation is a specialized manufacturing company. The Company designs, manufactures and markets engineered products and systems for application within the industries it serves. The Company operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. The Company serves aerospace and defense customers. The Company’s Avionics & Controls business segment includes avionics systems, control and communication systems, and interface technologies capabilities. The Company’s Sensors & Systems business segment includes power systems, connection technologies and advanced sensors capabilities. The Company’s Advanced Materials business segment includes engineered materials and defense technologies capabilities. The Company designs and manufactures ruggedized military personal communication equipment, primarily headsets, handsets and field communications.

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