Nortek (NASDAQ: NTK) and Universal Electronics (NASDAQ:UEIC) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitabiliy.

Profitability

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

Net Margins Return on Equity Return on Assets
Nortek 2.69% 271.83% 3.41%
Universal Electronics 2.68% 14.40% 7.73%

Institutional and Insider Ownership

93.1% of Universal Electronics shares are held by institutional investors. 5.8% of Universal Electronics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Nortek has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Universal Electronics has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nortek N/A N/A N/A $0.64 134.28
Universal Electronics $662.12 million 1.46 $59.62 million $1.21 55.25

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

Analyst Ratings

This is a summary of recent recommendations for Nortek and Universal Electronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nortek 0 0 0 0 N/A
Universal Electronics 0 1 3 0 2.75

Universal Electronics has a consensus target price of $75.08, suggesting a potential upside of 12.32%. Given Universal Electronics’ higher probable upside, analysts clearly believe Universal Electronics is more favorable than Nortek.

Summary

Universal Electronics beats Nortek on 8 of the 10 factors compared between the two stocks.

Nortek Company Profile

Nortek, Inc. (Nortek) is a diversified company delivering technology-driven products and solutions for lifestyle improvement at home and at work. The Company’s segments include the Air Quality and Home Solutions (AQH), which manufactures, markets and distributes room and whole house ventilation products; the Security and Control Solutions (SCS), which manufactures and distributes an array of products for residential applications; the Ergonomic and Productivity Solutions (ERG), which includes computer workstations with ergonomic features; the Residential and Commercial HVAC (RCH), which manufactures and sells split-system and packaged air conditioners; the Custom and Commercial Air Solutions (CAS), which designs, manufactures and sells custom heating, ventilation and air conditioning products and systems, and Audio, Video and Control Solutions (AVC), which manufactures and markets an array of products and solutions primarily for the residential audio, video automation and control.

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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