Kemet Corporation (KEM) & Electro Scientific Industries (ESIO) Critical Analysis
Kemet Corporation (NYSE: KEM) and Electro Scientific Industries (NASDAQ:ESIO) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Risk & Volatility
Kemet Corporation has a beta of 3.55, indicating that its share price is 255% more volatile than the S&P 500. Comparatively, Electro Scientific Industries has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.
Insider and Institutional Ownership
68.9% of Kemet Corporation shares are owned by institutional investors. Comparatively, 73.2% of Electro Scientific Industries shares are owned by institutional investors. 3.9% of Kemet Corporation shares are owned by insiders. Comparatively, 6.2% of Electro Scientific Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares Kemet Corporation and Electro Scientific Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Electro Scientific Industries||-18.49%||-22.18%||-15.53%|
Valuation and Earnings
This table compares Kemet Corporation and Electro Scientific Industries’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Kemet Corporation||$846.86 million||1.23||$110.10 million||$4.88||4.49|
|Electro Scientific Industries||$186.04 million||2.17||$2.78 million||($1.05)||-11.58|
Kemet Corporation has higher revenue and earnings than Electro Scientific Industries. Electro Scientific Industries is trading at a lower price-to-earnings ratio than Kemet Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and price targets for Kemet Corporation and Electro Scientific Industries, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Electro Scientific Industries||0||0||2||0||3.00|
Kemet Corporation presently has a consensus price target of $18.13, suggesting a potential downside of 17.20%. Electro Scientific Industries has a consensus price target of $10.50, suggesting a potential downside of 13.65%. Given Electro Scientific Industries’ stronger consensus rating and higher possible upside, analysts plainly believe Electro Scientific Industries is more favorable than Kemet Corporation.
Kemet Corporation beats Electro Scientific Industries on 7 of the 13 factors compared between the two stocks.
Kemet Corporation Company Profile
KEMET Corporation (KEMET) is a manufacturer of passive electronic components. The Company operates in two segments: Solid Capacitors, and Film and Electrolytic. The Solid Capacitors segment primarily produces tantalum, aluminum, polymer and ceramic capacitors. Solid Capacitors also produces tantalum powder used in the production of tantalum capacitors. The Film and Electrolytic Business Group produces film, paper and wet aluminum electrolytic capacitors. It also designs and produces EMI Filters. The Company’s product offerings include surface mount, which are attached directly to the circuit board; leaded capacitors, which are attached to the circuit board using lead wires, and chassis-mount and other pin-through-hole board-mount capacitors, which utilize attachment methods, such as screw terminal and snap-in. The Company sells its products to a range of original equipment manufacturers (OEMs) and electronics manufacturing services (EMS) providers.
Electro Scientific Industries Company Profile
Electro Scientific Industries, Inc. and its subsidiaries supply laser-based manufacturing solutions for industries reliant on microtechnologies. The Company operates through two segments: Component Processing and Micromachining. The Component Processing segment includes interconnect products, semiconductor products and component products. The interconnect, semiconductor and component products are sold to manufacturers of electronic components and are used to drill, cut, trim, ablate and test and mark features for the functionality of the component. The Micromachining segment includes products that are sold to manufacturers of end devices across various industries and are used to drill, cut or mark features on a range of materials, generally on the casing or external surface of the end device. Its integrated solutions allow industrial designers and process engineers to control the power of laser light to transform materials. It has operations in Asia, Europe and North America.
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