Head-To-Head Review: TE Connectivity (NYSE:TEL) and Littelfuse (NASDAQ:LFUS)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TE Connectivity	8.78%	20.22%	10.61%
Littelfuse	5.30%	9.74%	6.15%

Risk and Volatility

TE Connectivity has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Littelfuse has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Dividends

TE Connectivity pays an annual dividend of $2.84 per share and has a dividend yield of 1.3%. Littelfuse pays an annual dividend of $3.00 per share and has a dividend yield of 1.2%. TE Connectivity pays out 58.8% of its earnings in the form of a dividend. Littelfuse pays out 62.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. TE Connectivity has raised its dividend for 12 consecutive years and Littelfuse has raised its dividend for 15 consecutive years. TE Connectivity is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

91.4% of TE Connectivity shares are held by institutional investors. Comparatively, 96.1% of Littelfuse shares are held by institutional investors. 0.9% of TE Connectivity shares are held by company insiders. Comparatively, 2.5% of Littelfuse shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares TE Connectivity and Littelfuse”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TE Connectivity	$15.85 billion	4.00	$3.19 billion	$4.83	44.42
Littelfuse	$2.19 billion	2.83	$100.19 million	$4.80	52.06

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

Analyst Recommendations

This is a summary of recent ratings and price targets for TE Connectivity and Littelfuse, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TE Connectivity	0	6	8	2	2.75
Littelfuse	0	3	2	1	2.67

TE Connectivity presently has a consensus price target of $219.92, indicating a potential upside of 2.50%. Littelfuse has a consensus price target of $292.50, indicating a potential upside of 17.06%. Given Littelfuse’s higher possible upside, analysts plainly believe Littelfuse is more favorable than TE Connectivity.

Summary

TE Connectivity beats Littelfuse on 12 of the 18 factors compared between the two stocks.

About TE Connectivity

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the AsiaPacific, and the Americas. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas, and application tooling products for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; and interventional medical components, relays, heat shrink tubing, and wires and cables for industrial equipment, aerospace, defense, marine, medical, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, relays, heat shrink tubing, and antennas for the data and devices, and appliances markets. The company sells its products to approximately 140 countries primarily through direct sales to manufacturers, as well as through third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was founded in 1941 and is based in Schaffhausen, Switzerland.

About Littelfuse

Littelfuse, Inc. designs, manufactures, and sells electronic components, modules, and subassemblies in the Americas, Asia-Pacific, and Europe. The company operates through Electronic, Transportation, and Industrial segments. The Electronics segment offers fuses and fuse accessories, positive temperature coefficient resettable fuses, electromechanical switches and interconnect solutions, polymer electrostatic discharge suppressors, varistors, reed switch based magnetic sensing products, and gas discharge tubes; and discrete transient voltage suppressor (TVS) diodes, TVS diode arrays, protection and switching thyristors, metal-oxide-semiconductor field-effect transistors and diodes, and insulated gate bipolar transistors. This segment serves industrial motor drives and power conversion, automotive electronics, electric vehicle and related charging infrastructure, aerospace, power supplies, data centers, telecommunications, medical devices, alternative energy, building and home automation, appliances, and mobile electronics markets. The Transportation segment provides blade, resettable, and high-current and high-voltage fuses, as well as battery cable protectors; fuses, switches, relays, circuit breakers, and power distribution modules; and sensor products. This segment serves heavy-duty truck, construction, agriculture, material handling, and marine. The Industrial segment offers industrial fuses, protection relays, contactors, transformers, residual current devices, ground fault circuit interrupters, residual current monitors, arc fault detection devices, and temperature sensors for use in renewable energy and energy storage systems, electric vehicle infrastructure, HVAC systems, industrial safety, non-residential construction, MRO, mining, and factory automation. It sells its products through distributors, direct sales force, and manufacturers' representatives. Littelfuse, Inc. was founded in 1927 and is headquartered in Chicago, Illinois.