Critical Survey: CTS (NYSE:CTS) versus Universal Display (NASDAQ:OLED)

Universal Display (NASDAQ:OLED – Get Free Report) and CTS (NYSE:CTS – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Dividends

Universal Display pays an annual dividend of $1.80 per share and has a dividend yield of 1.5%. CTS pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Universal Display pays out 38.8% of its earnings in the form of a dividend. CTS pays out 8.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Universal Display has increased its dividend for 8 consecutive years. Universal Display is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Universal Display and CTS, as reported by MarketBeat.

Universal Display presently has a consensus target price of $177.60, suggesting a potential upside of 45.75%. Given Universal Display’s stronger consensus rating and higher possible upside, equities analysts clearly believe Universal Display is more favorable than CTS.

Risk & Volatility

Universal Display has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, CTS has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Profitability

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

Earnings & Valuation

This table compares Universal Display and CTS”s gross revenue, earnings per share and valuation.

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

Insider & Institutional Ownership

78.2% of Universal Display shares are owned by institutional investors. Comparatively, 96.9% of CTS shares are owned by institutional investors. 2.0% of Universal Display shares are owned by company insiders. Comparatively, 1.6% of CTS shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Universal Display beats CTS on 15 of the 17 factors compared between the two stocks.

About Universal Display

(Get Free Report)

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications in the United States and internationally. The company offers PHOLED technologies and materials for displays and lighting products under the UniversalPHOLED brand. It is also involved in the research, development, and commercialization of other OLED device and manufacturing technologies, including FOLED that are flexible OLEDs for the fabrication of OLEDs on flexible substrates; and OVJP, an organic vapor jet printing technology. In addition, the company provides technology development and support services, including third-party collaboration and support to third parties for the commercialization of their OLED products; and contract research services in the areas of chemical synthesis research, development, and commercialization for non-OLED applications, as well as engages in the intellectual property and technology licensing activities. Universal Display Corporation was founded in 1985 and is headquartered in Ewing, New Jersey.

About CTS

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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.