Comparing Knowles (KN) & Universal Electronics (UEIC)

Knowles (NYSE: KN) and Universal Electronics (NASDAQ:UEIC) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Institutional & Insider Ownership

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96.0% of Universal Electronics shares are owned by institutional investors. 3.7% of Knowles shares are owned by company insiders. Comparatively, 5.9% of Universal Electronics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Knowles has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Universal Electronics has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Knowles and Universal Electronics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knowles 0 1 4 0 2.80
Universal Electronics 0 1 2 0 2.67

Knowles currently has a consensus target price of $18.10, indicating a potential upside of 50.33%. Universal Electronics has a consensus target price of $71.33, indicating a potential upside of 40.56%. Given Knowles’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Knowles is more favorable than Universal Electronics.

Valuation & Earnings

This table compares Knowles and Universal Electronics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Knowles $744.20 million 1.45 $68.30 million $0.70 17.20
Universal Electronics $695.79 million 1.03 -$10.32 million $2.81 18.06

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

Profitability

This table compares Knowles and Universal Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knowles 8.32% 6.28% 4.30%
Universal Electronics -1.48% 11.65% 5.52%

Knowles Company Profile

Knowles Corporation is a global supplier of micro-acoustic, audio processing and specialty component solutions, serving the mobile consumer electronics, communications, medical, military, aerospace and industrial markets. The Company operates through two segments: Mobile Consumer Electronics (MCE) and Specialty Components (SC). MCE designs and manufactures acoustic products, including microphones and audio processing technologies used in mobile handsets, wearables and other consumer electronic devices. SC specializes in the design and manufacture of specialized electronic components used in medical and life science applications, as well as solutions and components used in communications infrastructure and a range of other markets. It has sales, support and engineering facilities in North America, Europe and Asia, and manufacturing facilities in Asia. It also offers acoustics components used in hearing aids, as well as high-end oscillators (timing devices) and capacitors.

Universal Electronics Company Profile

Universal Electronics Inc. (UEI) develops control and sensor technology solutions and manufactures a line of pre-programmed and universal remote control products, audio-video (AV) accessories, and intelligent wireless security and automation components. The Company’s offerings include pre-programmed universal infrared (IR) and radio frequency (RF) remote controls that are sold primarily to subscription broadcasting providers, original equipment manufacturers (OEMs), retailers, and private label customers, and integrated circuits, on which its software and universal device control database is embedded, sold primarily to OEMs, subscription broadcasting providers, and private label customers. Its offerings also include software, firmware and technology solutions that enable devices, such as televisions, set-top boxes, stereos, smart phones tablets, gaming controllers and other consumer electronic devices, to wirelessly connect and interact with home networks and interactive services.

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