Transcat (TRNS) versus TE Connectivity (TEL) Financial Comparison

Transcat (NASDAQ: TRNS) and TE Connectivity (NYSE:TEL) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Volatility & Risk

Transcat has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500. Comparatively, TE Connectivity has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Earnings and Valuation

This table compares Transcat and TE Connectivity’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Transcat $143.90 million 0.78 $4.52 million $0.68 23.09
TE Connectivity $13.11 billion 2.73 $1.68 billion $3.46 29.51

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

Insider and Institutional Ownership

52.9% of Transcat shares are held by institutional investors. Comparatively, 87.2% of TE Connectivity shares are held by institutional investors. 8.8% of Transcat shares are held by insiders. Comparatively, 0.7% of TE Connectivity shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Transcat and TE Connectivity’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Transcat 3.24% 10.03% 4.94%
TE Connectivity 9.12% 19.49% 9.71%

Dividends

TE Connectivity pays an annual dividend of $1.60 per share and has a dividend yield of 1.6%. Transcat does not pay a dividend. TE Connectivity pays out 46.2% of its earnings in the form of a dividend. Transcat has raised its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Transcat and TE Connectivity, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Transcat 0 0 3 0 3.00
TE Connectivity 0 2 9 0 2.82

Transcat currently has a consensus target price of $20.00, indicating a potential upside of 27.39%. TE Connectivity has a consensus target price of $139.50, indicating a potential upside of 36.63%. Given TE Connectivity’s higher probable upside, analysts plainly believe TE Connectivity is more favorable than Transcat.

Summary

TE Connectivity beats Transcat on 13 of the 17 factors compared between the two stocks.

About Transcat

Transcat, Inc. is a provider of calibration and laboratory instrument services and a distributor of professional grade test, measurement and control instrumentation. The Company conducts its business through two segments: service (Service) and distribution (Distribution). Through the Service segment, the Company offers calibration, repair, inspection, analytical qualifications, preventative maintenance and other related services, a majority of which are processed through its asset management system, CalTrak (CalTrak). Through its Distribution segment, the Company markets, sells and rents national brand instruments to customers around the globe. The Company is focused on providing its services and products to the life science industries, which include pharmaceutical, biotechnology, medical device manufacturing and other Food and Drug Administration (FDA)-regulated businesses.

About TE Connectivity

TE Connectivity Ltd. is a technology company. The Company designs and manufactures connectivity and sensors solutions. It operates through three segments: Transportation Solutions, Industrial Solutions and Communications Solutions. The Transportation Solutions segment offers connectivity and sensor technologies. Its products are used in the automotive, commercial transportation and sensors markets. It sells primary products, including terminals and connector systems and components, sensors, relays, application tooling, and wire and heat shrink tubing. The Industrial Solutions segment is a supplier of products that connect and distribute power, data and signals. The Industrial Solutions segment offers products, such as terminals and connector systems and components; heat shrink tubing; relays, and wire and cable. The Communications Solutions segment is a supplier of electronic components for the data and devices and appliances markets.

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