Xcerra Corporation (NASDAQ: XCRA) and Cohu (NASDAQ:COHU) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for Xcerra Corporation and Cohu, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcerra Corporation 0 5 0 0 2.00
Cohu 0 1 3 0 2.75

Xcerra Corporation presently has a consensus target price of $10.25, indicating a potential upside of 3.54%. Cohu has a consensus target price of $23.75, indicating a potential downside of 3.30%. Given Xcerra Corporation’s higher probable upside, equities research analysts clearly believe Xcerra Corporation is more favorable than Cohu.

Earnings and Valuation

This table compares Xcerra Corporation and Cohu’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xcerra Corporation $390.77 million 1.39 $34.79 million $0.42 23.57
Cohu $314.92 million 2.18 $37.41 million $0.69 35.59

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

Profitability

This table compares Xcerra Corporation and Cohu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcerra Corporation 5.77% 9.08% 6.71%
Cohu 6.21% 11.59% 7.76%

Institutional & Insider Ownership

86.1% of Xcerra Corporation shares are held by institutional investors. Comparatively, 83.9% of Cohu shares are held by institutional investors. 2.6% of Xcerra Corporation shares are held by insiders. Comparatively, 6.5% of Cohu shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Xcerra Corporation does not pay a dividend. Cohu pays out 34.8% of its earnings in the form of a dividend.

Risk & Volatility

Xcerra Corporation has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500. Comparatively, Cohu has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Summary

Cohu beats Xcerra Corporation on 11 of the 16 factors compared between the two stocks.

About Xcerra Corporation

Xcerra Corporation is a provider of test and handling capital equipment, interface products, test fixtures and related services to the semiconductor and electronics manufacturing industries. The Company operates through six segments: Semiconductor Test, Semiconductor Handlers, Contactors, PCB Test, Probes/Pins and Fixtures. The Semiconductor Test segment includes operations related to the design, manufacture and sale of automated test equipment for the semiconductor industry that is used to test system-on-a-chip, digital, analog and mixed signal integrated circuits. The Semiconductor Handlers segment includes operations related to the design, manufacture and sale of test handlers used in the testing of integrated circuits. The Contactors segment includes operations related to the design, manufacture and sale of test contactors. The PCB test segment includes operations related to design, manufacture and sale of equipment used in the testing of bare and loaded printed circuit boards.

About Cohu

Cohu, Inc. is a supplier of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors and thermal sub-systems used by global semiconductor manufacturers and test subcontractors. It develops, manufactures, sells and services a line of equipment capable of handling a range of integrated circuits and light-emitting diodes. It operates through semiconductor equipment segment. It offers products for the pick-and-place, gravity-feed, test-in-strip and turret handling, MEMS, burn-in and system-level test markets. It sells various products, including Delta MATRiX, Delta Pyramid, Delta Eclipse, Delta LinX, Rasco SO1000, Rasco SO2000, Rasco Saturn and Jupiter, Rasco Jaguar, Ismeca NY32, Ismeca NY20 and Delta Fusion HD. Its manufacturing operations are located in Malacca, Malaysia (handlers); Poway, California (thermal subsystems); Laguna, the Philippines (kits and contactors); Kolbermoor, Germany (handlers), and Osaka, Japan (contactors).

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