SMTC (NASDAQ:SMTX) and Benchmark Electronics (NYSE:BHE) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.

Insider & Institutional Ownership

14.6% of SMTC shares are held by institutional investors. 27.7% of SMTC shares are held by insiders. Comparatively, 0.6% of Benchmark Electronics shares are held by 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.

Earnings & Valuation

This table compares SMTC and Benchmark Electronics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SMTC $139.23 million 0.61 -$7.84 million N/A N/A
Benchmark Electronics $2.47 billion 0.40 -$31.96 million $1.61 14.12

SMTC has higher earnings, but lower revenue than Benchmark Electronics.

Profitability

This table compares SMTC and Benchmark Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SMTC -0.07% -0.56% -0.16%
Benchmark Electronics -3.14% 5.92% 3.66%

Risk & Volatility

SMTC has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Benchmark Electronics has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Dividends

Benchmark Electronics pays an annual dividend of $0.60 per share and has a dividend yield of 2.6%. SMTC does not pay a dividend. Benchmark Electronics pays out 37.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SMTC and Benchmark Electronics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SMTC 0 0 0 0 N/A
Benchmark Electronics 0 1 0 0 2.00

Benchmark Electronics has a consensus price target of $25.00, indicating a potential upside of 9.94%. Given Benchmark Electronics’ higher probable upside, analysts clearly believe Benchmark Electronics is more favorable than SMTC.

Summary

SMTC beats Benchmark Electronics on 7 of the 12 factors compared between the two stocks.

About SMTC

SMTC Corporation provides electronics manufacturing services worldwide. The company offers end-to-end electronics manufacturing services, including product design and engineering; printed circuit board assembly; production, enclosure, cable assembly, and precision metal fabrication; systems integration and testing; and configuration to order, build to order, and direct order fulfillment services. It provides integrated contract manufacturing services to original equipment manufacturers and technology companies primarily in the industrial, networking and communications, power and energy, and medical market sectors. SMTC Corporation was founded in 1985 and is headquartered in Markham, Canada.

About Benchmark Electronics

Benchmark Electronics, Inc. provides integrated electronic manufacturing services, engineering and design services, and precision machining services. The company provides services to original equipment manufacturers of industrial control equipment telecommunication equipment, computers and related products for business enterprises, medical devices, and testing and instrumentation products. Its services include comprehensive and integrated design and manufacturing services and solutions from initial product concept to volume production, including direct order fulfillment and aftermarket services. The company was founded by Cary T. Fu, Steven A. Barton and Donald E. Nigbor in 1979 and is headquartered in Angleton, TX.

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