Contrasting Advanced Energy Industries (NASDAQ:AEIS) and Sanmina (SANM)

Advanced Energy Industries (NASDAQ: AEIS) and Sanmina (NASDAQ:SANM) are both mid-cap technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and target prices for Advanced Energy Industries and Sanmina, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Energy Industries 0 3 3 0 2.50
Sanmina 0 3 2 0 2.40

Advanced Energy Industries currently has a consensus target price of $83.00, suggesting a potential upside of 21.58%. Sanmina has a consensus target price of $44.33, suggesting a potential upside of 32.34%. Given Sanmina’s higher possible upside, analysts plainly believe Sanmina is more favorable than Advanced Energy Industries.

Volatility & Risk

Advanced Energy Industries has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Sanmina has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Valuation & Earnings

This table compares Advanced Energy Industries and Sanmina’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Energy Industries $483.70 million 5.60 $127.45 million $5.12 13.33
Sanmina $6.87 billion 0.35 $138.83 million $1.78 18.82

Sanmina has higher revenue and earnings than Advanced Energy Industries. Advanced Energy Industries is trading at a lower price-to-earnings ratio than Sanmina, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Advanced Energy Industries and Sanmina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Energy Industries 33.76% 35.56% 25.61%
Sanmina 2.02% 12.27% 5.52%

Institutional and Insider Ownership

94.3% of Advanced Energy Industries shares are held by institutional investors. Comparatively, 92.5% of Sanmina shares are held by institutional investors. 1.1% of Advanced Energy Industries shares are held by company insiders. Comparatively, 5.0% of Sanmina shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Advanced Energy Industries beats Sanmina on 9 of the 14 factors compared between the two stocks.

Advanced Energy Industries Company Profile

Advanced Energy Industries, Inc. is a provider of engineered, precision power conversion, measurement and control solutions. The Company is engaged in designing, manufacturing, selling and supporting its power conversion products and solutions that transform power into various forms in various applications ranging from manufacturing and industrial processes to instrumentation, and test and measurement. It also provides repair and maintenance services for all of its products. Its process power systems include direct current (DC), pulsed DC, low frequency, high voltage, and radio frequency (RF) power supplies, matching networks, remote plasma sources for reactive gas applications and RF instrumentation. These power conversion systems refine, modify and control the raw electrical power from a utility and convert it into power that may be customized and is predictable and repeatable. Its power control modules and thermal instrumentation products are used in the semiconductor industry.

Sanmina Company Profile

Sanmina Corporation is a provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. The Company provides its offerings primarily to original equipment manufacturers (OEMs) in various industries, including communications networks, storage, industrial, defense and aerospace, medical and energy. The Company operates through two businesses: Integrated Manufacturing Solutions (IMS) and Components, Products and Services (CPS). IMS consists of printed circuit board assembly and test, final system assembly and test, and direct-order-fulfillment. Its Components include interconnect systems and mechanical systems. Its Products include memory, radio frequency (RF), optical and microelectronics solutions, defense and aerospace products, storage solutions and cloud-based manufacturing execution software. Its Services include design, engineering, logistics and repair services.

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