CUI Global (NASDAQ: CUI) and Fabrinet (NYSE:FN) are both small-cap industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, institutional ownership, earnings, profitabiliy and valuation.

Volatility & Risk

CUI Global has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, Fabrinet has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Institutional and Insider Ownership

63.7% of CUI Global shares are held by institutional investors. Comparatively, 94.3% of Fabrinet shares are held by institutional investors. 4.7% of CUI Global shares are held by insiders. Comparatively, 4.3% of Fabrinet shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares CUI Global and Fabrinet’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CUI Global $83.64 million 0.99 -$5.13 million ($0.39) -10.15
Fabrinet $1.33 billion 1.23 $121.84 million $2.38 18.44

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

Profitability

This table compares CUI Global and Fabrinet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CUI Global -10.10% -15.64% -9.53%
Fabrinet 6.74% 14.95% 9.71%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for CUI Global and Fabrinet, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CUI Global 0 0 3 0 3.00
Fabrinet 0 0 4 1 3.20

CUI Global presently has a consensus target price of $9.00, suggesting a potential upside of 127.27%. Fabrinet has a consensus target price of $54.35, suggesting a potential upside of 23.83%. Given CUI Global’s higher probable upside, equities analysts clearly believe CUI Global is more favorable than Fabrinet.

Summary

Fabrinet beats CUI Global on 12 of the 14 factors compared between the two stocks.

CUI Global Company Profile

CUI Global, Inc. is a platform company. The Company’s segments include Power and Electromechanical, Energy and Other. The Power and Electromechanical segment includes its subsidiaries, CUI, Inc. (CUI), CUI Japan and CUI-Canada, Inc., which provide electromechanical components, including power supplies, transformers, converters, connectors and industrial controls for original equipment manufacturers (OEMs). Its Power and Electro-Mechanical segment aggregates its product offerings into over two categories: components, including connectors, speakers, buzzers, test and measurement devices, and control solutions, including encoders and sensors, and power solutions. Its Energy segment includes its subsidiaries, Orbital Gas Systems Limited (Orbital) and the Orbital Gas Systems, North America, Inc., which consist of gas related test and measurement systems, including the GasPT, a natural gas inferential metering device. The Other segment includes corporate activity.

Fabrinet Company Profile

Fabrinet provides optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (OEMs) of products, such as optical communication components, modules and sub-systems, industrial lasers, medical devices and sensors. The Company offers a range of optical and electro-mechanical capabilities across the manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and test. The Company’s customer base includes companies in industries that require precision manufacturing capabilities, such as optical communications, industrial lasers, automotive, medical and sensors. Its customers in these industries support end-markets, including automotive, biotechnology, communications, materials processing, medical devices, metrology and semiconductor processing.

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