Flextronics International (NASDAQ: FLEX) and OSI Systems (NASDAQ:OSIS) are both electronic equipment & parts – nec companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Volatility and Risk

Flextronics International has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, OSI Systems has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Flextronics International and OSI Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flextronics International 2.25% 22.71% 4.81%
OSI Systems 3.06% 11.68% 5.15%

Insider & Institutional Ownership

96.1% of Flextronics International shares are held by institutional investors. Comparatively, 98.9% of OSI Systems shares are held by institutional investors. 0.8% of Flextronics International shares are held by insiders. Comparatively, 7.6% of OSI Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Flextronics International and OSI Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flextronics International 0 2 7 0 2.78
OSI Systems 0 0 5 0 3.00

Flextronics International presently has a consensus target price of $19.50, suggesting a potential upside of 6.91%. OSI Systems has a consensus target price of $97.40, suggesting a potential upside of 7.64%. Given OSI Systems’ stronger consensus rating and higher possible upside, analysts clearly believe OSI Systems is more favorable than Flextronics International.

Earnings and Valuation

This table compares Flextronics International and OSI Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Flextronics International $23.86 billion 0.40 $319.56 million $1.01 18.06
OSI Systems $960.95 million 1.79 $21.07 million $1.57 57.64

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

Summary

OSI Systems beats Flextronics International on 9 of the 14 factors compared between the two stocks.

About Flextronics International

Flex Ltd, formerly Flextronics International Ltd. provides design, engineering, manufacturing, and supply chain services and solutions. The Company designs, builds, ships and services packaged consumer electronics and industrial products for original equipment manufacturers (OEMs). Its segments include High Reliability Solutions (HRS), Consumer Technologies Group (CTG), Industrial and Emerging Industries (IEI) and Communications & Enterprise Compute (CEC). The HRS segment consists of its medical business, automotive business, and defense and aerospace businesses. The CTG segment includes its mobile devices business, consumer electronics business and high-volume computing business. The IEI segment consists of semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks, energy and metering, and lighting. The CEC segment includes radio access base stations, remote radio heads, and small cells for wireless infrastructure.

About OSI Systems

OSI Systems, Inc., through its subsidiaries, is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. The Company sells its products and provides related services in diversified markets, including homeland security, healthcare, defense and aerospace. The Company operates in three segments, which include Security, which provides security and inspection systems, turnkey security screening solutions and related services; Healthcare, which provides patient monitoring, diagnostic cardiology, anesthesia delivery and ventilation systems and defibrillators, and Optoelectronics and Manufacturing, which provides electronic components and electronic manufacturing services for the Security and Healthcare divisions, as well as to external original equipment manufacturer (OEM) customers and end users for applications in the defense, aerospace, medical and industrial markets, among others.

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