CTS (NYSE:CTS) vs. AUO (OTCMKTS:AUOTY) Critical Survey

AUO (OTCMKTS:AUOTY) and CTS (NYSE:CTS) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Earnings and Valuation

This table compares AUO and CTS”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AUO	$8.03 billion	0.36	-$584.71 million	$0.26	14.46
CTS	$531.52 million	2.31	$58.11 million	$1.97	21.50

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

Analyst Ratings

This is a breakdown of current ratings and price targets for AUO and CTS, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AUO	0	0	0	0	0.00
CTS	0	1	0	0	2.00

Profitability

This table compares AUO and CTS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AUO	N/A	N/A	N/A
CTS	11.14%	11.92%	8.31%

Dividends

AUO pays an annual dividend of $0.30 per share and has a dividend yield of 8.0%. CTS pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. AUO pays out 115.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CTS pays out 8.1% of its earnings in the form of a dividend.

Risk & Volatility

AUO has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, CTS has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Institutional & Insider Ownership

96.9% of CTS shares are owned by institutional investors. 16.0% of AUO shares are owned by insiders. Comparatively, 1.6% of CTS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

CTS beats AUO on 11 of the 14 factors compared between the two stocks.

About AUO

AUO Corporation researches, develops, produces, and sells thin film transistor liquid crystal displays (TFT-LCDs) and other flat panel displays for various applications. It operates through two segments, Display and Energy. The company designs, manufactures, and sells ingots, solar wafers, and solar modules, as well as provides technical engineering and maintenance services for solar system projects. It also sells and leases content management system and related hardware; designs digital signage content and field curation solutions; plans, designs, and develops construction project for environmental protection and related project management; and designs, manufactures, and sells TFT-LCD modules, TV sets and related parts, backlight modules, automotive parts, and precision plastic parts. In addition, the company engages in the development, manufacturing, and sale of medical equipment; services related to site rental and educational activities; research and development, and IP related business; solar power generation; and sale and sales support of TFTLCD panels. Further, it designs, develops, and sells software and hardware for health care industry; provides software and hardware integration system and equipment relating to intelligent manufacturing, as well as software development and related consulting services; and investment services. It operates in the People's Republic of China, Taiwan, the United States, Japan, Singapore, and internationally. The company was formerly known as AU Optronics Corp. and changed its name to AUO Corporation in June 2022. AUO Corporation was founded in 1996 and is headquartered in Hsinchu City, Taiwan.

About CTS

CTS Corporation manufactures and sells sensors, actuators, and connectivity components in North America, Europe, and Asia. The company provides encoders, rotary position sensors, slide potentiometers, industrial and commercial rotary potentiometers. It also provides non-contacting, and contacting pedals; and eBrake pedals. In addition, the company offers flow meters, hydrophones, non-destructive testing, sonar, ultrasonic imaging, piezoelectric materials, piezoelectric sense products, and bulk products. Further, it provides eMobility, chassis, current sensors, clutch, brake, position sensors, stroke sensor, seating, speed, throttle, transmission, turbo, temperature sensors, and technical related products. Additionally, the company offers DIP, rotary selector, tactile, rotary DIP, and toggle switches, as well as provides transducer related products. Furthermore, it provides EMI, RFI, and RFI products; specialty and resistors; and frequency control products. The company sells and markets its products through its sales engineers, independent manufacturer representatives, and distributors. CTS Corporation was founded in 1896 and is based in Lisle, Illinois.