Knowles (NYSE:KN) vs. IEH (OTCMKTS:IEHC) Critical Review

Knowles (NYSE:KN) and IEH (OTCMKTS:IEHC) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Profitability

This table compares Knowles and IEH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Knowles	10.76%	11.82%	8.75%
IEH	0.04%	0.06%	0.05%

Volatility and Risk

Knowles has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, IEH has a beta of -0.12, indicating that its stock price is 112% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Knowles and IEH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Knowles	0	2	2	1	2.80
IEH	0	1	0	0	2.00

Knowles currently has a consensus target price of $41.00, indicating a potential upside of 20.62%. Given Knowles’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Knowles is more favorable than IEH.

Insider & Institutional Ownership

96.3% of Knowles shares are held by institutional investors. 2.2% of Knowles shares are held by company insiders. Comparatively, 27.0% of IEH shares are held 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.

Valuation and Earnings

This table compares Knowles and IEH”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Knowles	$593.20 million	4.85	$44.20 million	$0.82	41.45
IEH	$29.42 million	2.64	-$1.30 million	($0.01)	-3,125.00

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

Summary

Knowles beats IEH on 14 of the 15 factors compared between the two stocks.

About Knowles

Knowles Corporation is a global supplier of advanced electronic components and acoustic solutions. Founded in 1946, the company began by developing microphones for hearing aids and has expanded into products for medical, industrial, defense, and other specialty markets. Knowles’ offerings include components for hearing health and specialty audio, such as balanced armature receivers and microphones, as well as precision devices including capacitors and radio-frequency components. These products are used in applications where performance, reliability, and compact size are important.

About IEH

IEH Corporation (OTCMKTS:IEHC) designs and manufactures high-reliability interconnect products and electronic packaging solutions. Its offerings include custom connectors, sockets, and related components used to establish electrical connections within demanding electronic systems. The company serves markets that require durable and precise interconnection technology, including aerospace, defense, medical, industrial, and other commercial applications. IEH’s products are intended for use in environments where performance, reliability, and resistance to demanding operating conditions are important.