Knowles Corporation (NYSE: KN) and Apple (NASDAQ:AAPL) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares Knowles Corporation and Apple’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knowles Corporation -2.44% 6.98% 4.62%
Apple 20.87% 35.40% 14.00%

Institutional & Insider Ownership

60.5% of Apple shares are held by institutional investors. 2.2% of Knowles Corporation shares are held by insiders. Comparatively, 0.1% of Apple shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Knowles Corporation has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Apple has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Knowles Corporation and Apple, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knowles Corporation 0 1 3 0 2.75
Apple 0 10 39 0 2.80

Knowles Corporation presently has a consensus price target of $18.50, indicating a potential upside of 23.01%. Apple has a consensus price target of $190.31, indicating a potential upside of 20.30%. Given Knowles Corporation’s higher possible upside, analysts clearly believe Knowles Corporation is more favorable than Apple.

Earnings and Valuation

This table compares Knowles Corporation and Apple’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Knowles Corporation $867.60 million 1.55 $141.10 million ($0.23) -65.39
Apple $223.51 billion 3.66 $70.21 billion $8.80 17.98

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

Dividends

Apple pays an annual dividend of $2.52 per share and has a dividend yield of 1.6%. Knowles Corporation does not pay a dividend. Apple pays out 28.6% of its earnings in the form of a dividend. Apple has increased its dividend for 4 consecutive years.

Summary

Apple beats Knowles Corporation on 13 of the 17 factors compared between the two stocks.

About Knowles Corporation

Knowles Corporation is a global supplier of micro-acoustic, audio processing and specialty component solutions, serving the mobile consumer electronics, communications, medical, military, aerospace and industrial markets. The Company operates through two segments: Mobile Consumer Electronics (MCE) and Specialty Components (SC). MCE designs and manufactures acoustic products, including microphones and audio processing technologies used in mobile handsets, wearables and other consumer electronic devices. SC specializes in the design and manufacture of specialized electronic components used in medical and life science applications, as well as solutions and components used in communications infrastructure and a range of other markets. It has sales, support and engineering facilities in North America, Europe and Asia, and manufacturing facilities in Asia. It also offers acoustics components used in hearing aids, as well as high-end oscillators (timing devices) and capacitors.

About Apple

Apple Inc. (Apple) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service and support offerings. The Company also delivers digital content and applications through the iTunes Store, App StoreSM, iBookstoreSM, and Mac App Store. The Company distributes its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In February 2012, the Company acquired app-search engine Chomp.

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