Financial Comparison: Avnet (AVT) & Ituran (ITRN)

Avnet (NYSE: AVT) and Ituran (NASDAQ:ITRN) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Analyst Recommendations

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This is a summary of current recommendations for Avnet and Ituran, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avnet 2 6 1 0 1.89
Ituran 0 2 0 0 2.00

Avnet presently has a consensus price target of $39.43, indicating a potential downside of 4.39%. Ituran has a consensus price target of $36.00, indicating a potential upside of 13.03%. Given Ituran’s stronger consensus rating and higher probable upside, analysts clearly believe Ituran is more favorable than Avnet.

Earnings and Valuation

This table compares Avnet and Ituran’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avnet $17.44 billion 0.28 $525.27 million $3.24 12.73
Ituran $238.52 million 2.80 $43.79 million $2.09 15.24

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

Institutional and Insider Ownership

96.3% of Avnet shares are held by institutional investors. Comparatively, 54.5% of Ituran shares are held by institutional investors. 1.7% of Avnet shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Avnet pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. Ituran pays an annual dividend of $0.96 per share and has a dividend yield of 3.0%. Avnet pays out 23.5% of its earnings in the form of a dividend. Ituran pays out 45.9% 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. Avnet has raised its dividend for 4 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Avnet 2.51% 7.87% 4.18%
Ituran 18.36% 34.76% 21.36%

Volatility and Risk

Avnet has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Ituran has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Summary

Avnet beats Ituran on 9 of the 17 factors compared between the two stocks.

About Avnet

Avnet, Inc., together with its subsidiaries, distributes electronic components worldwide. The company operates through two segments, Electronic Components and Premier Farnell. The Electronic Components segment markets and sells semiconductors; electronic components, including interconnect, passive and electromechanical devices; and other integrated components from electronic component manufacturers. This segment also offers customer support services, which facilitate customers to evaluate, design-in, and procure electronic components throughout the lifecycle of their technology products and systems. In addition, it provides integrated solutions, such as technical design, integration, and assembly of embedded products, systems, and solutions primarily for industrial applications, as well as for intelligent embedded and innovative display solutions comprising touch and passive displays. Further, it develops and manufactures standard board and industrial subsystems, and application-specific devices that enable it to produce systems tailored to specific customer requirements. Additionally, this segment offers design chain support that provides engineers with technical design solutions; engineering and technical resources to support product design, bill of materials development, and technical education and training; and supply chain solutions that provide support and logistical services to original equipment manufacturers, electronic manufacturing service providers, and electronic component manufacturers. It serves various markets, including automotive, communications, computer hardware and peripherals, industrial and manufacturing, medical equipment, and defense and aerospace. The Premier Farnell segment distributes electronic components primarily to support design engineers, maintenance and test engineers, makers, and entrepreneurs. Avnet, Inc. was founded in 1921 and is headquartered in Phoenix, Arizona.

About Ituran

Ituran Location and Control Ltd., together with its subsidiaries, provides location-based services and wireless communications products in Israel, Brazil, Argentina, and the United States. The company's Location-Based Services segment provides stolen vehicle recovery and tracking services, which enable to locate, track, and recover stolen vehicles for its subscribers; fleet management services that enable corporate and individual customers to track and manage their vehicles in real time; and personal locator services that allow customers to protect valuable merchandise and equipment. This segment also offers on-demand navigation guidance, information, and assistance to its customers, such as the provision of traffic reports, help with directions, and information on the location of gas stations, car repair shops, post offices, hospitals, and other facilities, as well as Connect, a car service based on the Android platform, which provides access to Android market applications and to various services from car systems and remote communications. This segment provides its services to insurance companies and agents, car manufacturers, dealers and importers, cooperative sales channels, and private subscribers. The company's Wireless Communications Products segment provides Base Site, a radio receiver, which includes a processor and a data computation unit to collect and send data to and from transponders, and send that data to control centers; Control Center, a center consisting of software used to collect data from various base sites, conduct location calculations, and transmit location data to various customers and law enforcement agencies; GPS/GPRS-based products, such as navigation and tracking devices installed in vehicles; and SMART, a portable transmitter installed in vehicles that sends a signal to the base site enabling the location of vehicles, equipment, or an individual. Ituran Location and Control Ltd. was founded in 1994 and is headquartered in Azor, Israel.

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