Contrasting Fabrinet (FN) and Amphenol Corporation (APH)

Fabrinet (NYSE: FN) and Amphenol Corporation (NYSE:APH) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Earnings and Valuation

This table compares Fabrinet and Amphenol Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fabrinet $1.33 billion 1.12 $121.84 million $2.38 16.84
Amphenol Corporation $6.51 billion 3.68 $1.54 billion $2.97 26.40

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

Risk and Volatility

Fabrinet has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Amphenol Corporation has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Insider & Institutional Ownership

95.1% of Fabrinet shares are held by institutional investors. Comparatively, 96.0% of Amphenol Corporation shares are held by institutional investors. 4.3% of Fabrinet shares are held by insiders. Comparatively, 2.5% of Amphenol Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Fabrinet and Amphenol Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fabrinet 6.74% 14.95% 9.71%
Amphenol Corporation 14.37% 24.98% 10.89%

Dividends

Amphenol Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 0.8%. Fabrinet does not pay a dividend. Amphenol Corporation pays out 21.5% of its earnings in the form of a dividend. Amphenol Corporation has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent ratings for Fabrinet and Amphenol Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fabrinet 0 0 4 1 3.20
Amphenol Corporation 0 3 3 1 2.71

Fabrinet currently has a consensus target price of $53.55, suggesting a potential upside of 33.61%. Amphenol Corporation has a consensus target price of $77.57, suggesting a potential downside of 1.08%. Given Fabrinet’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Fabrinet is more favorable than Amphenol Corporation.

Summary

Amphenol Corporation beats Fabrinet on 11 of the 17 factors compared between the two stocks.

About Fabrinet

Fabrinet provides optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (OEMs) of products, such as optical communication components, modules and sub-systems, industrial lasers, medical devices and sensors. The Company offers a range of optical and electro-mechanical capabilities across the manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and test. The Company’s customer base includes companies in industries that require precision manufacturing capabilities, such as optical communications, industrial lasers, automotive, medical and sensors. Its customers in these industries support end-markets, including automotive, biotechnology, communications, materials processing, medical devices, metrology and semiconductor processing.

About Amphenol Corporation

Amphenol Corporation (Amphenol) is a designer, manufacturer and marketer of electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor- based products, and coaxial and specialty cable. The Company operates through two segments, which include Interconnect Products and Assemblies, and Cable Products and Solutions. Its Interconnect Product and Assemblies segment primarily is engaged in designing, manufacturing and marketing a range of connector and connector systems, value-add products, and other products, including antennas and sensors, used in a range of applications in various set of end markets. Its Cable Products and Solutions segment primarily engages in designing, manufacturing and marketing cables, value-added products and components for use primarily in the broadband communications and information technology markets. It designs, manufactures and assembles its products at facilities in the Americas, Europe, Asia, Australia and Africa.

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