Methode Electronics (NYSE:MEI) and Jabil (NYSE:JBL) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Analyst Recommendations
This is a summary of current recommendations and price targets for Methode Electronics and Jabil, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Methode Electronics | 0 | 1 | 1 | 0 | 2.50 |
| Jabil | 0 | 3 | 4 | 0 | 2.57 |
Methode Electronics currently has a consensus price target of $37.00, indicating a potential downside of 16.61%. Jabil has a consensus price target of $53.3333, indicating a potential downside of 1.60%. Given Jabil's stronger consensus rating and higher probable upside, analysts plainly believe Jabil is more favorable than Methode Electronics.
Dividends
Methode Electronics pays an annual dividend of $0.44 per share and has a dividend yield of 1.0%. Jabil pays an annual dividend of $0.32 per share and has a dividend yield of 0.6%. Methode Electronics pays out 14.1% of its earnings in the form of a dividend. Jabil pays out 91.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Methode Electronics has increased its dividend for 1 consecutive years and Jabil has increased its dividend for 1 consecutive years. Methode Electronics is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Methode Electronics and Jabil's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Methode Electronics | 13.22% | 16.19% | 9.38% |
| Jabil | 0.78% | 14.01% | 1.80% |
Earnings & Valuation
This table compares Methode Electronics and Jabil's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Methode Electronics | $1.02 billion | 1.67 | $123.40 million | $3.12 | 14.21 |
| Jabil | $27.27 billion | 0.30 | $53.91 million | $0.35 | 154.71 |
Methode Electronics has higher earnings, but lower revenue than Jabil. Methode Electronics is trading at a lower price-to-earnings ratio than Jabil, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
88.8% of Methode Electronics shares are owned by institutional investors. Comparatively, 87.8% of Jabil shares are owned by institutional investors. 3.2% of Methode Electronics shares are owned by insiders. Comparatively, 2.8% of Jabil shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Methode Electronics has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Jabil has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.
Summary
Methode Electronics beats Jabil on 10 of the 16 factors compared between the two stocks.
