NVE (NASDAQ:NVEC) and EMCORE (NASDAQ:EMKR) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for NVE and EMCORE, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NVE 0 0 0 0 N/A
EMCORE 0 0 3 0 3.00

EMCORE has a consensus target price of $5.15, indicating a potential upside of 79.44%. Given EMCORE’s higher possible upside, analysts clearly believe EMCORE is more favorable than NVE.

Institutional & Insider Ownership

75.5% of NVE shares are held by institutional investors. Comparatively, 60.4% of EMCORE shares are held by institutional investors. 2.3% of NVE shares are held by company insiders. Comparatively, 1.7% of EMCORE shares are held by company 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.

Volatility & Risk

NVE has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, EMCORE has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500.

Earnings and Valuation

This table compares NVE and EMCORE’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NVE $26.47 million 12.17 $14.51 million N/A N/A
EMCORE $85.62 million 0.96 -$17.45 million ($0.53) -5.42

NVE has higher earnings, but lower revenue than EMCORE.

Dividends

NVE pays an annual dividend of $4.00 per share and has a dividend yield of 6.0%. EMCORE does not pay a dividend.

Profitability

This table compares NVE and EMCORE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NVE 55.22% 16.97% 16.78%
EMCORE -30.49% -14.98% -11.57%

Summary

NVE beats EMCORE on 10 of the 13 factors compared between the two stocks.

About NVE

NVE Corporation develops and sells devices that use spintronics, a nanotechnology that utilizes electron spin to acquire, store, and transmit information. The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data. Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position or speed primarily for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers, such as IL500-series couplers, IL600-series passive-input couplers, IL700/IL200-series high-speed couplers, IL4/IL3-series isolated network couplers, and IL800-series top-of-the-line couplers. In addition, it licenses the spintronic magnetoresistive random access memory technology, as well as conducts contract research and development activities. The company sells its products through distributors in the United States, Europe, the Middle East, Africa, Asia-Pacific, and internationally. NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.

About EMCORE

EMCORE Corporation, together with its subsidiaries, provides advanced mixed-signal optics products in California. It offers broadband products comprising cable television; laser, receiver, and photodetector component products; radio frequency over glass FTTP products; satellite/microwave communications products; and wireless communications products. The company also provides chip devices products, including high-power gain chips, GPON fiber-to-the-premises, and data center chip products; and navigation systems products, such as fiber optic gyroscope products and inertial measurement units and navigation systems products. It sells its products through direct sales force, application engineers, third party sales representatives, and distributors. EMCORE Corporation was founded in 1984 and is headquartered in Alhambra, California.

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