Kemet Corporation (NYSE: KEM) and Methode Electronics (NYSE:MEI) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Insider & Institutional Ownership

55.7% of Kemet Corporation shares are owned by institutional investors. Comparatively, 90.1% of Methode Electronics shares are owned by institutional investors. 3.9% of Kemet Corporation shares are owned by insiders. Comparatively, 4.4% of Methode Electronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Kemet Corporation has a beta of 3.6, indicating that its stock price is 260% more volatile than the S&P 500. Comparatively, Methode Electronics has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Earnings & Valuation

This table compares Kemet Corporation and Methode Electronics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kemet Corporation $846.86 million 1.14 $110.10 million $4.88 4.15
Methode Electronics $816.50 million 1.73 $149.90 million $2.48 15.46

Methode Electronics has higher revenue, but lower earnings than Kemet Corporation. Kemet Corporation is trading at a lower price-to-earnings ratio than Methode Electronics, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Kemet Corporation and Methode Electronics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kemet Corporation 0 1 1 0 2.50
Methode Electronics 0 1 3 0 2.75

Kemet Corporation currently has a consensus target price of $18.13, suggesting a potential downside of 10.54%. Methode Electronics has a consensus target price of $45.50, suggesting a potential upside of 18.64%. Given Methode Electronics’ stronger consensus rating and higher probable upside, analysts plainly believe Methode Electronics is more favorable than Kemet Corporation.

Dividends

Methode Electronics pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Kemet Corporation does not pay a dividend. Methode Electronics pays out 14.5% of its earnings in the form of a dividend.

Profitability

This table compares Kemet Corporation and Methode Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kemet Corporation 33.25% 20.21% 4.53%
Methode Electronics 11.38% 18.81% 14.16%

Summary

Methode Electronics beats Kemet Corporation on 9 of the 16 factors compared between the two stocks.

About Kemet Corporation

KEMET Corporation (KEMET) is a manufacturer of passive electronic components. The Company operates in two segments: Solid Capacitors, and Film and Electrolytic. The Solid Capacitors segment primarily produces tantalum, aluminum, polymer and ceramic capacitors. Solid Capacitors also produces tantalum powder used in the production of tantalum capacitors. The Film and Electrolytic Business Group produces film, paper and wet aluminum electrolytic capacitors. It also designs and produces EMI Filters. The Company’s product offerings include surface mount, which are attached directly to the circuit board; leaded capacitors, which are attached to the circuit board using lead wires, and chassis-mount and other pin-through-hole board-mount capacitors, which utilize attachment methods, such as screw terminal and snap-in. The Company sells its products to a range of original equipment manufacturers (OEMs) and electronics manufacturing services (EMS) providers.

About Methode Electronics

Methode Electronics, Inc. (Methode) is a manufacturer of component and subsystem devices. The Company designs, manufactures and markets devices employing electrical, radio remote control, electronic, wireless and sensing technologies. The Company operates through segments, including Automotive, Interface, Power Products and Other. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile original equipment manufacturers (OEMs). The Interface segment provides a range of copper and fiber-optic interface and interface solutions. The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, such as PowerRail solution, high-current low voltage flexible power cabling systems and powder coated bus bars. The Other segment includes medical devices, inverters and battery systems, and insulated gate bipolar transistor solutions.

Receive News & Stock Ratings for Kemet Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Kemet Corporation and related stocks with our FREE daily email newsletter.