Methode Electronics (NYSE: MEI) is one of 32 public companies in the “Electronic Component” industry, but how does it contrast to its peers? We will compare Methode Electronics to related companies based on the strength of its risk, institutional ownership, dividends, analyst recommendations, earnings, valuation and profitability.

Profitability

This table compares Methode Electronics and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Methode Electronics 11.16% 18.11% 13.68%
Methode Electronics Competitors 1.94% -2.08% 0.53%

Dividends

Methode Electronics pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Methode Electronics pays out 14.6% of its earnings in the form of a dividend. As a group, “Electronic Component” companies pay a dividend yield of 2.3% and pay out 51.5% of their earnings in the form of a dividend.

Earnings and Valuation

This table compares Methode Electronics and its peers top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Methode Electronics $825.80 million $150.80 million 17.66
Methode Electronics Competitors $894.66 million $186.07 million 11.38

Methode Electronics’ peers have higher revenue and earnings than Methode Electronics. Methode Electronics is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Methode Electronics has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, Methode Electronics’ peers have a beta of 1.03, meaning that their average stock price is 3% more volatile than the S&P 500.

Insider and Institutional Ownership

89.8% of Methode Electronics shares are owned by institutional investors. Comparatively, 56.1% of shares of all “Electronic Component” companies are owned by institutional investors. 4.4% of Methode Electronics shares are owned by company insiders. Comparatively, 9.1% of shares of all “Electronic Component” companies are owned 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.

Analyst Recommendations

This is a summary of current ratings for Methode Electronics and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Methode Electronics 0 0 3 0 3.00
Methode Electronics Competitors 99 354 508 6 2.44

Methode Electronics currently has a consensus price target of $48.33, indicating a potential upside of 11.24%. As a group, “Electronic Component” companies have a potential downside of 6.92%. Given Methode Electronics’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Methode Electronics is more favorable than its peers.

Summary

Methode Electronics beats its peers on 9 of the 15 factors compared.

About Methode Electronics

Methode Electronics, Inc. (Methode) is a manufacturer of component and subsystem devices. The Company designs, manufactures and markets devices employing electrical, radio remote control, electronic, wireless and sensing technologies. The Company operates through segments, including Automotive, Interface, Power Products and Other. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile original equipment manufacturers (OEMs). The Interface segment provides a range of copper and fiber-optic interface and interface solutions. The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, such as PowerRail solution, high-current low voltage flexible power cabling systems and powder coated bus bars. The Other segment includes medical devices, inverters and battery systems, and insulated gate bipolar transistor solutions.

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