Analyzing Sparton (SPA) & ARM (ARMH)

Sparton (NYSE: SPA) and ARM (NASDAQ:ARMH) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Sparton and ARM, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sparton 0 0 0 0 N/A
ARM 0 0 1 0 3.00

Profitability

This table compares Sparton and ARM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sparton -0.43% 8.52% 3.03%
ARM 33.10% 19.72% 16.87%

Valuation & Earnings

This table compares Sparton and ARM’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sparton $397.56 million 0.57 $1.31 million ($0.17) -135.88
ARM N/A N/A N/A $0.96 70.59

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

Dividends

ARM pays an annual dividend of $0.34 per share and has a dividend yield of 0.5%. Sparton does not pay a dividend. ARM pays out 35.4% of its earnings in the form of a dividend.

Institutional & Insider Ownership

63.0% of Sparton shares are held by institutional investors. Comparatively, 19.7% of ARM shares are held by institutional investors. 3.5% of Sparton shares are held by company insiders. Comparatively, 3.0% of ARM shares are held 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

ARM beats Sparton on 7 of the 11 factors compared between the two stocks.

Sparton Company Profile

Sparton Corporation is a provider of design, development and manufacturing services for electromechanical devices, as well as engineered products complementary to the same electromechanical value stream. The Company operates through two segments: Manufacturing & Design Services (MDS) and Engineered Components & Products (ECP). The Company serves the medical and biotechnology, military and aerospace, and industrial and commercial markets. Its products and services include offerings for original equipment manufacturers (OEM) and emerging technology (ET) customers, which utilize microprocessor-based systems, such as transducers, printed circuit boards and assemblies, and sensors, as well as development and design engineering services. It develops and manufactures sonobuoys, which are anti-submarine warfare (ASW) devices. The Company also manufactures rugged flat panel display systems for military panel personal computer workstations, air traffic control and industrial applications.

ARM Company Profile

ARM Holdings plc (ARM) is a company engaged in designing a range of inter-related intellectual property (IP), including microprocessors, Physical IP, and supporting software and tools. Its product offering includes 16/32/64-bit reduced instruction set computing (RISC) microprocessors, data engines, graphics processors, digital libraries, embedded memories, peripherals, software and development tools, as well as analog functions and high-speed connectivity products. The Company licenses and sells its technology and products to international electronics companies, which in turn manufacture, market and sell microprocessors, application-specific integrated circuits (ASICs), application-specific standard processors (ASSPs) and microcontrollers (MCUs) based on ARM’s technology to systems companies for incorporation into a range of end products. Its principal geographic markets are Europe, the United States and Asia Pacific.

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