Head-To-Head Analysis: Key Tronic (KTCC) and Xerox (XRX)

Key Tronic (NASDAQ: KTCC) and Xerox (NYSE:XRX) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Key Tronic and Xerox’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Key Tronic 0.49% 2.80% 1.41%
Xerox 1.74% 17.08% 5.62%

Institutional & Insider Ownership

42.8% of Key Tronic shares are held by institutional investors. Comparatively, 88.4% of Xerox shares are held by institutional investors. 7.2% of Key Tronic shares are held by company insiders. Comparatively, 0.3% of Xerox shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Xerox pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Key Tronic does not pay a dividend. Xerox pays out 28.7% of its earnings in the form of a dividend. Xerox has increased its dividend for 5 consecutive years.

Earnings and Valuation

This table compares Key Tronic and Xerox’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Key Tronic $467.80 million 0.19 $5.61 million $0.51 16.25
Xerox $10.27 billion 0.70 $195.00 million $3.48 8.10

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

Risk & Volatility

Key Tronic has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500. Comparatively, Xerox has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Key Tronic and Xerox, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Key Tronic 0 0 0 0 N/A
Xerox 0 4 5 0 2.56

Xerox has a consensus target price of $36.36, suggesting a potential upside of 28.97%. Given Xerox’s higher possible upside, analysts plainly believe Xerox is more favorable than Key Tronic.

Summary

Xerox beats Key Tronic on 13 of the 16 factors compared between the two stocks.

Key Tronic Company Profile

Key Tronic Corporation, doing business as KeyTronicEMS Co., provides electronic manufacturing services (EMS) and solutions to original equipment manufacturers in the United States and internationally. The company offers integrated electronic and mechanical engineering, assembly, sourcing and procurement, logistics, and new product testing services. Its services include product design; surface mount technologies and pin through hole capability for printed circuit board assembly; tool making; precision plastic molding; sheet metal fabrication; liquid injection molding; complex assembly; automated tape winding; prototype design; and full product assembly services. The company also manufactures keyboards and other input devices. It markets its products and services primarily through field sales people and distributors. Key Tronic Corporation was founded in 1969 and is headquartered in Spokane Valley, Washington.

Xerox Company Profile

Xerox Corporation designs, develops, and sells document management systems and solutions worldwide. It offers managed document services, including managed print services and multi-channel communication services, as well as a range of digital solutions, such as workflow automation services, content management, and digitization services. The company also provides desktop monochrome and color printers, and multifunction printers; copiers, digital printing presses and light production devices, and solutions; graphic communications and commercial printers; inkjet presses; and FreeFlow portfolio of software solutions for the automation and integration of print jobs processing. In addition, it sells paper products, wide-format systems, and global imaging systems network integration solutions. The company sells its products and services directly to its customers through sales force, as well as through independent agents, dealers, value-added resellers, systems integrators, and the Web. Xerox Corporation was founded in 1906 and is headquartered in Norwalk, Connecticut.

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