CUI Global (NASDAQ: CUI) and Neonode (NASDAQ:NEON) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
CUI Global -10.29% -16.61% -9.84%
Neonode -48.19% -123.74% -44.58%

Analyst Recommendations

This is a summary of recent ratings for CUI Global and Neonode, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CUI Global 0 0 3 0 3.00
Neonode 0 1 1 0 2.50

CUI Global currently has a consensus price target of $9.00, indicating a potential upside of 163.93%. Neonode has a consensus price target of $3.00, indicating a potential upside of 156.41%. Given CUI Global’s stronger consensus rating and higher possible upside, analysts clearly believe CUI Global is more favorable than Neonode.

Insider and Institutional Ownership

65.5% of CUI Global shares are owned by institutional investors. Comparatively, 25.7% of Neonode shares are owned by institutional investors. 4.7% of CUI Global shares are owned by company insiders. Comparatively, 15.8% of Neonode shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares CUI Global and Neonode’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 0.85 -$5.13 million ($0.39) -8.74
Neonode $9.41 million 6.07 -$3.47 million ($0.10) -11.70

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

Risk and Volatility

CUI Global has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Neonode has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.

Summary

CUI Global beats Neonode on 8 of the 13 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.

Neonode Company Profile

Neonode Inc., formerly SBE, Inc., develops and licenses user interfaces and optical infrared touch solutions. The Company’s technology offers multiple features, including the ability to sense an object’s size, depth, velocity, pressure and proximity to any type of surface. It operates through the touch technology licensing business segment. It licenses its multi-touch technology to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who incorporate it into devices that they produce and sell. In addition, it develops prototype products and is engaged in product engineering design discussions with various global OEMs and ODMs. The Company offers its family of touch solutions under the brands MultiSensing and zForce. Its solution provides sense enablement through touch and proximity sensing. Its technology has application in various fields, such as laptop computers, all-in-one computers, standalone monitors, printer products and global positioning systems.

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