Methode Electronics (NYSE: MEI) is one of 32 publicly-traded companies in the “Electronic Component” industry, but how does it compare to its peers? We will compare Methode Electronics to similar businesses based on the strength of its risk, dividends, valuation, earnings, analyst recommendations, profitability and institutional ownership.

Insider and Institutional Ownership

90.2% of Methode Electronics shares are owned by institutional investors. Comparatively, 56.3% of shares of all “Electronic Component” companies are owned by institutional investors. 4.4% of Methode Electronics shares are owned by company insiders. Comparatively, 9.1% of shares of all “Electronic Component” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Methode Electronics pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Methode Electronics pays out 14.6% of its earnings in the form of a dividend. As a group, “Electronic Component” companies pay a dividend yield of 2.5% and pay out 51.5% of their earnings in the form of a dividend.

Profitability

This table compares Methode Electronics and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Methode Electronics 11.16% 18.11% 13.68%
Methode Electronics Competitors 2.04% -1.99% 0.66%

Analyst Ratings

This is a breakdown of current ratings and price targets for Methode Electronics and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Methode Electronics 0 0 3 0 3.00
Methode Electronics Competitors 98 349 502 6 2.44

Methode Electronics presently has a consensus price target of $48.33, indicating a potential upside of 23.77%. As a group, “Electronic Component” companies have a potential downside of 2.67%. Given Methode Electronics’ stronger consensus rating and higher possible upside, equities analysts plainly believe Methode Electronics is more favorable than its peers.

Volatility and Risk

Methode Electronics has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Methode Electronics’ peers have a beta of 1.02, meaning that their average share price is 2% more volatile than the S&P 500.

Valuation & Earnings

This table compares Methode Electronics and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Methode Electronics $825.80 million $150.80 million 15.87
Methode Electronics Competitors $895.26 million $186.21 million 10.26

Methode Electronics’ peers have higher revenue and earnings than Methode Electronics. Methode Electronics is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Methode Electronics beats its peers on 9 of the 15 factors compared.

Methode Electronics Company Profile

Methode Electronics, Inc. (Methode) is a manufacturer of component and subsystem devices. The Company designs, manufactures and markets devices employing electrical, radio remote control, electronic, wireless and sensing technologies. The Company operates through segments, including Automotive, Interface, Power Products and Other. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile original equipment manufacturers (OEMs). The Interface segment provides a range of copper and fiber-optic interface and interface solutions. The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, such as PowerRail solution, high-current low voltage flexible power cabling systems and powder coated bus bars. The Other segment includes medical devices, inverters and battery systems, and insulated gate bipolar transistor solutions.

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