Comparing Richardson Electronics (NASDAQ:RELL) and Ituran Location and Control Ltd. (US) (ITRN)

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Richardson Electronics (NASDAQ:RELL) and Ituran Location and Control Ltd. (US) (NASDAQ:ITRN) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, risk, profitability, valuation, dividends and earnings.

Risk and Volatility

Richardson Electronics has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, Ituran Location and Control Ltd. (US) has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Earnings and Valuation

This table compares Richardson Electronics and Ituran Location and Control Ltd. (US)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Richardson Electronics $163.21 million 0.60 $3.82 million N/A N/A
Ituran Location and Control Ltd. (US) $238.52 million 2.95 $43.79 million $2.09 15.80

Ituran Location and Control Ltd. (US) has higher revenue and earnings than Richardson Electronics.

Dividends

Richardson Electronics pays an annual dividend of $0.24 per share and has a dividend yield of 3.2%. Ituran Location and Control Ltd. (US) pays an annual dividend of $0.92 per share and has a dividend yield of 2.8%. Ituran Location and Control Ltd. (US) pays out 44.0% of its earnings in the form of a dividend.

Profitability

This table compares Richardson Electronics and Ituran Location and Control Ltd. (US)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Richardson Electronics 1.39% 2.14% 1.77%
Ituran Location and Control Ltd. (US) 25.13% 32.17% 17.75%

Institutional & Insider Ownership

43.6% of Richardson Electronics shares are held by institutional investors. Comparatively, 58.0% of Ituran Location and Control Ltd. (US) shares are held by institutional investors. 35.6% of Richardson Electronics 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Richardson Electronics and Ituran Location and Control Ltd. (US), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Richardson Electronics 0 0 0 0 N/A
Ituran Location and Control Ltd. (US) 0 0 1 0 3.00

Ituran Location and Control Ltd. (US) has a consensus target price of $41.00, suggesting a potential upside of 24.17%. Given Ituran Location and Control Ltd. (US)’s higher possible upside, analysts plainly believe Ituran Location and Control Ltd. (US) is more favorable than Richardson Electronics.

Summary

Ituran Location and Control Ltd. (US) beats Richardson Electronics on 10 of the 14 factors compared between the two stocks.

About Richardson Electronics

Richardson Electronics Ltd. engages in the provision of engineered solutions and distributes electronic components to the electron device marketplace. It operates through the following segments: Power and Microwave Technologies Group (PMT), Canvys, and Healthcare. The PMT segment provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair-all through its existing global infrastructure. The Canvys segment offers customized display solutions serving the corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturers markets. The Healthcare segment manufactures, refurbishes, and distributes replacement parts for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations, and multi-vendor service providers. The company was founded on May 31, 1947 and is headquartered in LaFox, IL.

About Ituran Location and Control Ltd. (US)

Ituran Location and Control Ltd., together with its subsidiaries, provides location-based services and wireless communications products in Israel, Brazil, Argentina, and the United States. The company's Location-Based Services segment provides stolen vehicle recovery and tracking services, which locate, track, and recover stolen vehicles for its subscribers; fleet management services that enable corporate and individual customers to track and manage their vehicles in real time; and personal locator services that allow customers to protect valuable merchandise and equipment. It also offers on-demand navigation guidance, information, and assistance, including the provision of traffic reports and directions, as well as information on the location of gas stations, car repair shops, post offices, hospitals, and other facilities; and Connect, an Android platform based car service that provides access to Android market applications and various services through manufacturer interface. This segment serves insurance companies and agents, car manufacturers, dealers and importers, cooperative sales channels, and private subscribers. The company's Wireless Communications Products segment provides Base Site, a radio receiver that includes a processor and a data computation unit to collect and send data to and from transponders, and to control centers; Control Center, a center consisting of software used to collect data from various base sites, conduct location calculations, and transmit location data to various customers and law enforcement agencies; navigation and tracking devices installed in vehicles; and SMART, a portable transmitter installed in vehicles that sends a signal to the base site enabling the location of vehicles, equipment, or an individual. As of December 31, 2017, it served approximately 180,000 end-users through 38,000 corporate customers. The company was founded in 1994 and is headquartered in Azor, Israel.

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