SigmaTron International (SGMA) vs. Sanmina (SANM) Critical Comparison

SigmaTron International (NASDAQ:SGMA) and Sanmina (NASDAQ:SANM) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Institutional and Insider Ownership

29.7% of SigmaTron International shares are held by institutional investors. Comparatively, 93.2% of Sanmina shares are held by institutional investors. 8.2% of SigmaTron International shares are held by insiders. Comparatively, 5.1% of Sanmina shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares SigmaTron International and Sanmina’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SigmaTron International $278.13 million 0.06 -$3.24 million N/A N/A
Sanmina $7.11 billion 0.25 -$90.93 million $1.84 13.98

SigmaTron International has higher earnings, but lower revenue than Sanmina.

Profitability

This table compares SigmaTron International and Sanmina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SigmaTron International -1.49% 3.73% 1.39%
Sanmina -1.28% 10.24% 3.91%

Risk & Volatility

SigmaTron International has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Sanmina has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for SigmaTron International and Sanmina, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SigmaTron International 0 0 0 0 N/A
Sanmina 0 1 3 0 2.75

Sanmina has a consensus price target of $35.75, suggesting a potential upside of 38.94%. Given Sanmina’s higher possible upside, analysts plainly believe Sanmina is more favorable than SigmaTron International.

Summary

Sanmina beats SigmaTron International on 9 of the 12 factors compared between the two stocks.

SigmaTron International Company Profile

SigmaTron International, Inc. operates as an independent provider of electronic manufacturing services (EMS). Its EMS services include the production of printed circuit board assemblies and completely assembled (box-build) electronic products. The company also offers automatic and manual assembly, and testing of products; material sourcing and procurement services; manufacturing and test engineering support services; design services; warehousing and distribution services; and assistance in obtaining product approval from governmental and other regulatory bodies. It primarily serves customers operating in the industrial electronics, consumer electronics, and medical/life sciences industries in the United States, Mexico, China, Vietnam, and Taiwan. The company markets its services through independent manufacturers' representative organizations. SigmaTron International, Inc. was founded in 1993 and is headquartered in Elk Grove Village, Illinois.

Sanmina Company Profile

Sanmina Corporation provides integrated manufacturing solutions, components, products and repair, logistics, and after-market services worldwide. The company offers product design and engineering solutions, including concept development, detailed design, prototyping, validation, preproduction, and manufacturing design release; manufacturing solutions of components, subassemblies, and complete systems; final system assembly and test services; direct order fulfillment and logistics services; after-market product service and support; and supply chain management services. It also provides interconnect systems, such as printed circuit board fabrication, backplane, cable assemblies, and plastic injection moldings; mechanical systems comprising enclosures and precision machining; memory, radio frequency, optical, and microelectronic solutions; defense and aerospace products; storage solutions; and cloud-based manufacturing execution software. Sanmina Corporation offers its solutions primarily to original equipment manufacturers in the communications networks, computing and storage, multimedia, industrial and semiconductor capital equipment, defense and aerospace, medical, energy, and automotive industries. The company was formerly known as Sanmina-SCI Corporation and changed its name to Sanmina Corporation in November 2012. Sanmina Corporation was founded in 1980 and is headquartered in San Jose, California.

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