CUI Global (NASDAQ: CUI) and Neonode (NASDAQ:NEON) are both small-cap industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Risk and Volatility

CUI Global has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Neonode has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.

Profitability

This table compares CUI Global and Neonode’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CUI Global -10.29% -16.61% -9.84%
Neonode -48.19% -123.74% -44.58%

Analyst Ratings

This is a breakdown of current ratings and price targets for CUI Global and Neonode, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CUI Global 0 0 3 0 3.00
Neonode 0 1 1 0 2.50

CUI Global presently has a consensus target price of $9.00, indicating a potential upside of 130.77%. Neonode has a consensus target price of $3.00, indicating a potential upside of 158.62%. Given Neonode’s higher probable upside, analysts clearly believe Neonode is more favorable than CUI Global.

Earnings and Valuation

This table compares CUI Global and Neonode’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CUI Global $83.00 million 0.99 -$6.25 million ($0.39) -10.00
Neonode $9.17 million 7.41 -$3.21 million ($0.10) -11.60

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

Insider and Institutional Ownership

63.1% of CUI Global shares are owned by institutional investors. Comparatively, 14.7% of Neonode shares are owned by institutional investors. 4.7% of CUI Global shares are owned by company insiders. Comparatively, 14.9% of Neonode shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

CUI Global beats Neonode on 7 of the 13 factors compared between the two stocks.

About CUI Global

CUI Global, Inc. is a platform company. The Company’s segments include Power and Electromechanical, Energy and Other. The Power and Electromechanical segment includes its subsidiaries, CUI, Inc. (CUI), CUI Japan and CUI-Canada, Inc., which provide electromechanical components, including power supplies, transformers, converters, connectors and industrial controls for original equipment manufacturers (OEMs). Its Power and Electro-Mechanical segment aggregates its product offerings into over two categories: components, including connectors, speakers, buzzers, test and measurement devices, and control solutions, including encoders and sensors, and power solutions. Its Energy segment includes its subsidiaries, Orbital Gas Systems Limited (Orbital) and the Orbital Gas Systems, North America, Inc., which consist of gas related test and measurement systems, including the GasPT, a natural gas inferential metering device. The Other segment includes corporate activity.

About Neonode

Neonode Inc., formerly SBE, Inc., develops and licenses user interfaces and optical infrared touch solutions. The Company’s technology offers multiple features, including the ability to sense an object’s size, depth, velocity, pressure and proximity to any type of surface. It operates through the touch technology licensing business segment. It licenses its multi-touch technology to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who incorporate it into devices that they produce and sell. In addition, it develops prototype products and is engaged in product engineering design discussions with various global OEMs and ODMs. The Company offers its family of touch solutions under the brands MultiSensing and zForce. Its solution provides sense enablement through touch and proximity sensing. Its technology has application in various fields, such as laptop computers, all-in-one computers, standalone monitors, printer products and global positioning systems.

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