Analyzing Alps Electric (OTCMKTS:APELY) and ePlus (NASDAQ:PLUS)

ePlus (NASDAQ:PLUS) and Alps Electric (OTCMKTS:APELY) are both mid-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Valuation and Earnings

This table compares ePlus and Alps Electric”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ePlus	$2.44 billion	0.98	$132.64 million	$4.57	20.09
Alps Electric	$6.77 billion	0.43	$177.41 million	$1.74	15.98

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

Volatility & Risk

ePlus has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Alps Electric has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500.

Profitability

This table compares ePlus and Alps Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ePlus	4.91%	11.51%	6.73%
Alps Electric	2.64%	7.24%	4.09%

Analyst Ratings

This is a summary of current recommendations and price targets for ePlus and Alps Electric, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ePlus	0	2	0	0	2.00
Alps Electric	0	1	0	0	2.00

Institutional & Insider Ownership

93.8% of ePlus shares are held by institutional investors. Comparatively, 0.1% of Alps Electric shares are held by institutional investors. 2.2% of ePlus shares are held by company insiders. Comparatively, 10.4% of Alps Electric shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

ePlus pays an annual dividend of $1.08 per share and has a dividend yield of 1.2%. Alps Electric pays an annual dividend of $0.47 per share and has a dividend yield of 1.7%. ePlus pays out 23.6% of its earnings in the form of a dividend. Alps Electric pays out 27.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

ePlus beats Alps Electric on 9 of the 13 factors compared between the two stocks.

About ePlus

ePlus inc., together with its subsidiaries, provides information technology (IT) solutions that enable organizations to optimize their IT environment and supply chain processes in the United States and internationally. It operates through two segments, Technology and Financing. The Technology segment offers hardware, perpetual and subscription software, maintenance, software assurance, and internally provided and outsourced services; managed services or infrastructure and cloud; and enhanced maintenance support, service desk, storage-as-a-service, cloud hosted and managed, and managed security services; and professional, staff augmentation, cloud consulting, consulting, and security services. The Financing segment engages in financing arrangements, such as sales-type and operating leases; loans and consumption-based financing arrangements; and underwriting, management, and disposal of IT equipment and assets. Its financing operations comprise sales, pricing, credit, contracts, accounting, and risk and asset management. This segment primarily finances IT, communication-related, and medical equipment; and industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment directly, as well as through vendors. The company serves commercial entities, state and local governments, government contractors, healthcare, and educational institutions. The company was formerly known as MLC Holdings, Inc. and changed its name to ePlus inc. in 1999. ePlus inc. was founded in 1990 and is headquartered in Herndon, Virginia.

About Alps Electric

Alps Alpine Co., Ltd. manufactures and sells electronic components in Japan and internationally. It operates through four segments: Components, Sensor Communication, Module Systems, and Logistics. The company’s products for the consumer, industrial equipment, and IoT markets include TACT switches, worker condition monitoring systems, HAPTIC reactor, actuator for cameras, remote monitoring system for logistics, analog meter monitoring system, resistive position sensor, pressure sensor, air environment sensor module, three-axis geomagnetic sensor, humidity sensor, and pc board mount current sensor. Its products for the automotive market comprises TACT and detector switches, Encoder, aspherical glass lens with metal holder, HAPTIC reactor, trimagic converter, current sensor, magnetic sensor, millimeter-wave sensor, GNSS module, 5G NR module, power window switch, electric shifter, sound system, cabin controller, smart door trim, electric shifter, integrated display, premium sound speakers, and customized car products. The company also provides systems development, office, and financing and leasing services, as well as transportation, storage, and forwarding services. The company was formerly known as Alps Electric Co., Ltd. and changed its name to Alps Alpine Co., Ltd. in January 2019. The company was incorporated in 1948 and is headquartered in Tokyo, Japan.