Contrasting NVE Corporation (NVEC) and TE Connectivity (TEL)

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

Risk and Volatility

NVE Corporation has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, TE Connectivity has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Dividends

NVE Corporation pays an annual dividend of $4.00 per share and has a dividend yield of 5.4%. TE Connectivity pays an annual dividend of $1.60 per share and has a dividend yield of 2.0%. NVE Corporation pays out 148.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TE Connectivity pays out 34.0% of its earnings in the form of a dividend. NVE Corporation has increased its dividend for 6 consecutive years. NVE Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for NVE Corporation and TE Connectivity, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NVE Corporation 0 1 0 0 2.00
TE Connectivity 1 1 5 0 2.57

NVE Corporation presently has a consensus price target of $79.00, suggesting a potential upside of 6.64%. TE Connectivity has a consensus price target of $82.67, suggesting a potential upside of 1.51%. Given NVE Corporation’s higher probable upside, analysts plainly believe NVE Corporation is more favorable than TE Connectivity.

Valuation and Earnings

This table compares NVE Corporation and TE Connectivity’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NVE Corporation $29.23 million 12.27 $18.97 million $2.70 27.44
TE Connectivity $12.99 billion 2.22 $2.80 billion $4.71 17.29

TE Connectivity has higher revenue and earnings than NVE Corporation. TE Connectivity is trading at a lower price-to-earnings ratio than NVE Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
NVE Corporation 44.87% 14.02% 13.81%
TE Connectivity 12.98% 19.76% 9.69%

Insider & Institutional Ownership

71.4% of NVE Corporation shares are held by institutional investors. Comparatively, 90.1% of TE Connectivity shares are held by institutional investors. 2.3% of NVE Corporation shares are held by company insiders. Comparatively, 1.5% of TE Connectivity shares are held 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.

Summary

NVE Corporation beats TE Connectivity on 9 of the 17 factors compared between the two stocks.

NVE Corporation Company Profile

NVE Corporation develops and sells devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store and transmit information. The Company manufactures spintronic products, including sensors and couplers that are used to acquire and transmit data. The Company has also licensed its spintronic magnetoresistive random access memory technology (MRAM). Its parts are found in industrial, scientific, and medical applications. The Company’s products include sensors, couplers and MRAM products. Its sensor products detect the strength or gradient of magnetic fields and are used to determine position or speed. Its spintronic couplers combine a GMR sensor element and an IsoLoop integrated microscopic coil. MRAM uses spintronics to store data. It combines the speed of static random-access memory (SRAM), the density of dynamic random-access memory (DRAM) and the nonvolatility of flash memory. Data is stored in the spin of the electrons in thin metal alloy films.

TE Connectivity Company Profile

TE Connectivity Ltd. is a technology company. The Company designs and manufactures connectivity and sensors solutions. It operates through three segments: Transportation Solutions, Industrial Solutions and Communications Solutions. The Transportation Solutions segment offers connectivity and sensor technologies. Its products are used in the automotive, commercial transportation and sensors markets. It sells primary products, including terminals and connector systems and components, sensors, relays, application tooling, and wire and heat shrink tubing. The Industrial Solutions segment is a supplier of products that connect and distribute power, data and signals. The Industrial Solutions segment offers products, such as terminals and connector systems and components; heat shrink tubing; relays, and wire and cable. The Communications Solutions segment is a supplier of electronic components for the data and devices and appliances markets.

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