Avnet (NYSE: AVT) and RADA Electronic Industries (NASDAQ:RADA) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Volatility & Risk

Avnet has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, RADA Electronic Industries has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500.

Insider & Institutional Ownership

96.4% of Avnet shares are owned by institutional investors. Comparatively, 10.2% of RADA Electronic Industries shares are owned by institutional investors. 1.7% of Avnet shares are owned by insiders. Comparatively, 1.0% of RADA Electronic Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Avnet and RADA Electronic Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avnet 2 5 1 0 1.88
RADA Electronic Industries 0 0 0 0 N/A

Avnet currently has a consensus price target of $38.50, indicating a potential downside of 0.52%. Given Avnet’s higher probable upside, equities analysts clearly believe Avnet is more favorable than RADA Electronic Industries.

Dividends

Avnet pays an annual dividend of $0.76 per share and has a dividend yield of 2.0%. RADA Electronic Industries does not pay a dividend. Avnet pays out 23.5% of its earnings in the form of a dividend. Avnet has raised its dividend for 4 consecutive years.

Earnings & Valuation

This table compares Avnet and RADA Electronic Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avnet $17.44 billion 0.26 $525.27 million $3.24 11.94
RADA Electronic Industries $26.18 million 3.14 $2.23 million N/A N/A

Avnet has higher revenue and earnings than RADA Electronic Industries.

Profitability

This table compares Avnet and RADA Electronic Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avnet -0.72% 8.08% 4.27%
RADA Electronic Industries 7.52% 6.34% 4.81%

Summary

Avnet beats RADA Electronic Industries on 10 of the 15 factors compared between the two stocks.

About Avnet

Avnet, Inc., together with its subsidiaries, distributes electronic components worldwide. The company operates through two segments, Electronic Components and Premier Farnell. The Electronic Components segment markets and sells semiconductors; electronic components, including interconnect, passive and electromechanical devices; and other integrated components from electronic component manufacturers. This segment also offers customer support services, which facilitate customers to evaluate, design-in, and procure electronic components throughout the lifecycle of their technology products and systems. In addition, it provides integrated solutions, such as technical design, integration, and assembly of embedded products, systems, and solutions primarily for industrial applications, as well as for intelligent embedded and innovative display solutions comprising touch and passive displays. Further, it develops and manufactures standard board and industrial subsystems, and application-specific devices that enable it to produce systems tailored to specific customer requirements. Additionally, this segment offers design chain support that provides engineers with technical design solutions; engineering and technical resources to support product design, bill of materials development, and technical education and training; and supply chain solutions that provide support and logistical services to original equipment manufacturers, electronic manufacturing service providers, and electronic component manufacturers. It serves various markets, including automotive, communications, computer hardware and peripherals, industrial and manufacturing, medical equipment, and defense and aerospace. The Premier Farnell segment distributes electronic components primarily to support design engineers, maintenance and test engineers, makers, and entrepreneurs. Avnet, Inc. was founded in 1921 and is headquartered in Phoenix, Arizona.

About RADA Electronic Industries

RADA Electronic Industries Ltd. develops, manufactures, markets, and sells defense electronics to various air forces and companies worldwide. The company offers military avionics systems, including flight data recorders for fighter aircraft; digital video/audio/data recorders with data transfer functions; high-rate data recorders for aircraft and airborne pods; video recorders and airborne data servers; a range of head-up-displays color video cameras for fighter aircraft; and various ground debriefing solutions. It also provides avionics solutions comprising integrated avionics upgrade suites for fighters and mission aircraft; mission and display computers; weapon management systems; data interface and processing computers; mission data recorders and debriefing solutions; HUD video cameras; and avionics for unmanned aircraft vehicles (UAVs). In addition, the company offers inertial navigation systems (INS); R-100F, a FOG based navigation-grade embedded GPS-INS for fighters and helicopters; R-200M, a MEMS-based multiple-sensor aided INS for UAVs and backup INS for manned aircraft; and modular avionics and MEMS-based INS for UAVs and disposable applications. Further, it provides ground-based radars for tactical applications, such as defense forces protection and border protection. The company has strategic relationships with Embraer S.A., Hindustan Aeronautics Ltd., Israel Aerospace Industries Ltd., Lockheed Martin Corporation, Rafael Advanced Defense Systems Ltd., Israel Military Industries Ltd., and DRS Technologies, as well as Boeing Defense, Space & Security. RADA Electronic Industries Ltd. was founded in 1970 and is headquartered in Netanya, Israel.

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