Critical Survey: AVX (AVX) & Transcat (TRNS)

AVX (NYSE: AVX) and Transcat (NASDAQ:TRNS) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitability, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for AVX and Transcat, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AVX 0 1 0 0 2.00
Transcat 0 0 2 0 3.00

AVX currently has a consensus price target of $17.00, indicating a potential downside of 0.12%. Transcat has a consensus price target of $20.00, indicating a potential upside of 29.03%. Given Transcat’s stronger consensus rating and higher possible upside, analysts plainly believe Transcat is more favorable than AVX.

Insider & Institutional Ownership

24.6% of AVX shares are owned by institutional investors. Comparatively, 56.5% of Transcat shares are owned by institutional investors. 0.5% of AVX shares are owned by company insiders. Comparatively, 8.8% of Transcat shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

AVX has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Transcat has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Earnings & Valuation

This table compares AVX and Transcat’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AVX $1.31 billion 2.18 $125.78 million $0.05 340.47
Transcat $143.90 million 0.77 $4.52 million $0.68 22.79

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

Dividends

AVX pays an annual dividend of $0.46 per share and has a dividend yield of 2.7%. Transcat does not pay a dividend. AVX pays out 920.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AVX has raised its dividend for 5 consecutive years.

Profitability

This table compares AVX and Transcat’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AVX 0.48% 6.07% 5.44%
Transcat 3.24% 10.23% 4.95%

Summary

Transcat beats AVX on 10 of the 17 factors compared between the two stocks.

About AVX

AVX Corporation (AVX) is a manufacturer and supplier and reseller of a line of passive electronic components, interconnect devices and related products. AVX operates in three segments: Passive Components, Kyocera Electronic Devices (KED Resale) and Interconnect. The Passive Components segment consists of surface mount and leaded ceramic capacitors, surface mount and leaded tantalum capacitors, surface mount and leaded film capacitors, thick and thin film packages of multiple passive integrated components, thermistors, inductors and resistive products. The KED Resale segment consists of ceramic capacitors, frequency control devices, surface acoustic wave (SAW) devices, sensor products, radio frequency (RF) modules, actuators, acoustic devices and connectors produced by Kyocera and resold by AVX. The Interconnect segment consists primarily of AVX Interconnect automotive, telecom and memory connectors manufactured by AVX Interconnect or purchased from other manufacturers for resale.

About Transcat

Transcat, Inc. is a provider of calibration and laboratory instrument services and a distributor of professional grade test, measurement and control instrumentation. The Company conducts its business through two segments: service (Service) and distribution (Distribution). Through the Service segment, the Company offers calibration, repair, inspection, analytical qualifications, preventative maintenance and other related services, a majority of which are processed through its asset management system, CalTrak (CalTrak). Through its Distribution segment, the Company markets, sells and rents national brand instruments to customers around the globe. The Company is focused on providing its services and products to the life science industries, which include pharmaceutical, biotechnology, medical device manufacturing and other Food and Drug Administration (FDA)-regulated businesses.

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