Richardson Electronics (RELL) and TE Connectivity (TEL) Financial Analysis

Richardson Electronics (NASDAQ:RELL) and TE Connectivity (NYSE:TEL) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Richardson Electronics and TE Connectivity, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Richardson Electronics 0 0 0 0 N/A
TE Connectivity 0 4 8 0 2.67

TE Connectivity has a consensus target price of $105.70, suggesting a potential upside of 44.14%. Given TE Connectivity’s higher possible upside, analysts clearly believe TE Connectivity is more favorable than Richardson Electronics.

Earnings and Valuation

This table compares Richardson Electronics and TE Connectivity’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Richardson Electronics $163.21 million 0.58 $3.82 million N/A N/A
TE Connectivity $13.99 billion 1.80 $2.57 billion $5.61 13.07

TE Connectivity has higher revenue and earnings than Richardson Electronics.

Profitability

This table compares Richardson Electronics and TE Connectivity’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Richardson Electronics 2.56% 2.12% 1.76%
TE Connectivity 17.69% 20.06% 10.22%

Volatility & Risk

Richardson Electronics has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, TE Connectivity has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

43.6% of Richardson Electronics shares are owned by institutional investors. Comparatively, 91.7% of TE Connectivity shares are owned by institutional investors. 35.6% of Richardson Electronics shares are owned by company insiders. Comparatively, 0.7% of TE Connectivity shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Richardson Electronics pays an annual dividend of $0.24 per share and has a dividend yield of 3.3%. TE Connectivity pays an annual dividend of $1.76 per share and has a dividend yield of 2.4%. TE Connectivity pays out 31.4% of its earnings in the form of a dividend. TE Connectivity has increased its dividend for 7 consecutive years.

Summary

TE Connectivity beats Richardson Electronics on 11 of the 15 factors compared between the two stocks.

About Richardson Electronics

Richardson Electronics, Ltd. engages in power and microwave technologies, customized display solutions, and healthcare equipment businesses in North America, the Asia Pacific, Europe, and Latin America. The company's Power and Microwave Technologies Group segment provides engineered solutions, power grid and microwave tubes, and related consumables; high value flat panel detector solutions, replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions, as well as power conversion and RF and microwave components for broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology applications. Its products are used to control, switch, or amplify electrical power signals, as well as are used as display devices in alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. This segment also offers technical services for microwave and industrial equipment. The company's Canvys segment provides custom display solutions, such as touch screens, protective panels, custom enclosures, specialized cabinet finishes, application specific software packages, and certification services to corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturer markets. Its Healthcare segment manufactures, refurbishes, and distributes diagnostic imaging replacement parts, including CT and MRI systems and tubes, hydrogen thyratrons, klystrons, and magnetrons; flat panel detector upgrades; and additional replacement solutions. This segment serves hospitals, medical centers, asset management companies, independent service organizations, and multi-vendor service providers. The company was founded in 1947 and is headquartered in LaFox, Illinois.

About TE Connectivity

TE Connectivity Ltd., together with its subsidiaries, engages in the design, manufacture, and sale of connectivity and sensors solutions in the Americas, Europe, the Middle East, Africa, and the Asia–Pacific. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment primarily provides terminals and connector systems and components, sensors, and relays, as well as application tooling, wires, and heat shrink tubing for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; heat shrink tubing; relays; and wires and cables for industrial equipment, aerospace, defense, oil and gas, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, undersea telecommunication systems, antennas, relays, and heat shrink tubing for the data and devices, subsea communications, and appliances markets. TE Connectivity Ltd. offers its products to approximately 150 countries primarily through direct selling to manufacturers, as well as through online TE store and third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was incorporated in 2000 and is based in Schaffhausen, Switzerland.

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