Deswell Industries (NASDAQ:DSWL – Get Free Report) and OSI Systems (NASDAQ:OSIS – Get Free Report) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.
Profitability
This table compares Deswell Industries and OSI Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Deswell Industries | N/A | N/A | N/A |
| OSI Systems | 8.66% | 20.33% | 7.24% |
Institutional & Insider Ownership
89.2% of OSI Systems shares are held by institutional investors. 39.0% of Deswell Industries shares are held by company insiders. Comparatively, 4.3% of OSI Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Deswell Industries | $61.33 million | 0.78 | $10.63 million | $0.48 | 6.27 |
| OSI Systems | $1.79 billion | 1.82 | $154.71 million | $9.00 | 22.70 |
OSI Systems has higher revenue and earnings than Deswell Industries. Deswell Industries is trading at a lower price-to-earnings ratio than OSI Systems, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Deswell Industries has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, OSI Systems has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for Deswell Industries and OSI Systems, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Deswell Industries | 0 | 0 | 1 | 0 | 3.00 |
| OSI Systems | 0 | 2 | 5 | 0 | 2.71 |
OSI Systems has a consensus target price of $281.71, indicating a potential upside of 37.90%. Given OSI Systems’ higher probable upside, analysts plainly believe OSI Systems is more favorable than Deswell Industries.
Summary
OSI Systems beats Deswell Industries on 12 of the 14 factors compared between the two stocks.
About Deswell Industries
Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers in China, the United States, Europe, Hong Kong, the United Kingdom, Canada, and internationally. It operates through two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue audio mixers, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, wired and wireless audio streaming products, and headphones; printed circuit board assemblies; and medical products. The company was founded in 1987 and is based in Macau.
About OSI Systems
OSI Systems, Inc. designs and manufactures electronic systems and components. It operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation monitoring, explosive and narcotics trace detection systems, and optical inspection systems under the Rapiscan name. It also provides site design, installation, training, and technical support services; and turnkey security screening solutions under the S2 name. The Healthcare segment offers patient monitoring, cardiology and remote monitoring, and connected care systems and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC Flexible Circuits names; LCD displays for medical, industrial, and consumer electronics applications; and flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.
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