Cohu (NASDAQ:COHU) and Frequency Electronics (NASDAQ:FEIM) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Cohu and Frequency Electronics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cohu 0 0 4 0 3.00
Frequency Electronics 0 0 0 0 N/A

Cohu presently has a consensus price target of $29.33, indicating a potential upside of 67.81%. Given Cohu’s higher possible upside, equities analysts clearly believe Cohu is more favorable than Frequency Electronics.

Institutional and Insider Ownership

72.2% of Cohu shares are owned by institutional investors. Comparatively, 46.4% of Frequency Electronics shares are owned by institutional investors. 3.9% of Cohu shares are owned by insiders. Comparatively, 41.7% of Frequency Electronics 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.

Risk and Volatility

Cohu has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Frequency Electronics has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Frequency Electronics does not pay a dividend. Cohu pays out 17.9% of its earnings in the form of a dividend.

Profitability

This table compares Cohu and Frequency Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cohu 8.62% 13.46% 9.39%
Frequency Electronics -55.22% -20.37% -15.49%

Valuation & Earnings

This table compares Cohu and Frequency Electronics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cohu $352.70 million 2.02 $32.84 million $1.34 13.04
Frequency Electronics $39.41 million 2.28 -$23.77 million N/A N/A

Cohu has higher revenue and earnings than Frequency Electronics.

Summary

Cohu beats Frequency Electronics on 10 of the 13 factors compared between the two stocks.

Cohu Company Profile

Cohu, Inc., through its subsidiaries, engages in the development, manufacture, sale, and servicing of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors, and thermal sub-systems for semiconductor manufacturers and test subcontractors worldwide. It offers pick-and-place handlers; thermal handler for microprocessors, graphics processors, and other integrated circuits; pick-and-place platform for fabless and outsourced semiconductor assembly and test customers, as well as for integrated device manufacturers; a platform for assembly automation; gravity-feed and test-in-strip handlers; and turret handler for testing and inspection of integrated circuits, LEDs, and discrete devices. The company also provides MEMS test modules that generate physical stimuli for testing of sensor integrated circuits; thermal sub-systems that offer temperature control of the integrated circuit during the testing process; contactor solutions; spares; and a range of device dedication kits that enable handlers to process various semiconductor packages. Cohu, Inc. markets its products through direct sales force and independent sales representatives. The company was formerly known as Cohu Electronics, Inc. and changed its name to Cohu, Inc. in 1972. Cohu, Inc. was founded in 1947 and is headquartered in Poway, California.

Frequency Electronics Company Profile

Frequency Electronics, Inc. designs, develops, manufactures, and sells precision time and frequency control products and components for microwave integrated circuit applications. It operates through two segments, FEI-NY and FEI-Zyfer. The FEI-NY segment offers precision time, frequency generation, and synchronization products and subsystems used in communication satellites, terrestrial cellular telephone, or other ground-based telecommunication stations; and other components and systems for the United States military. The FEI-Zyfer segment designs, develops, and manufactures products for precision time, and frequency generation and synchronization primarily incorporating global positioning system technologies into communications systems, computer networks, test equipment, and military command and control terminals for ground and satellite link applications. The company's products are used in commercial, government satellite payload systems, secure communications, command, control, communication, computer, intelligence, security and reconnaissance, counter measures, and electronic warfare applications for the United States government on land, sea, and air-borne platforms. It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia. Frequency Electronics, Inc. was founded in 1961 and is headquartered in Mitchel Field, New York.

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