Analyzing Deswell Industries (NASDAQ:DSWL) and American Superconductor (NASDAQ:AMSC)

Deswell Industries (NASDAQ:DSWL) and American Superconductor (NASDAQ:AMSC) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Profitability

This table compares Deswell Industries and American Superconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Deswell Industries	N/A	N/A	N/A
American Superconductor	6.00%	9.35%	6.20%

Volatility and Risk

Deswell Industries has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, American Superconductor has a beta of 3, suggesting that its stock price is 200% more volatile than the S&P 500.

Earnings & Valuation

This table compares Deswell Industries and American Superconductor”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deswell Industries	$67.61 million	0.83	$11.14 million	N/A	N/A
American Superconductor	$222.82 million	13.51	$6.03 million	$0.39	170.97

Deswell Industries has higher earnings, but lower revenue than American Superconductor.

Analyst Ratings

This is a summary of recent ratings and price targets for Deswell Industries and American Superconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deswell Industries	0	0	1	0	3.00
American Superconductor	0	1	1	0	2.50

American Superconductor has a consensus price target of $39.00, indicating a potential downside of 41.51%. Given American Superconductor’s higher probable upside, analysts clearly believe American Superconductor is more favorable than Deswell Industries.

Institutional & Insider Ownership

52.3% of American Superconductor shares are owned by institutional investors. 39.0% of Deswell Industries shares are owned by company insiders. Comparatively, 4.8% of American Superconductor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

American Superconductor beats Deswell Industries on 8 of the 11 factors compared between the two stocks.

About Deswell Industries

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers in China, the United States, Europe, Hong Kong, the United Kingdom, Canada, and internationally. It operates through two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue audio mixers, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, wired and wireless audio streaming products, and headphones; printed circuit board assemblies; and medical products. The company was founded in 1987 and is based in Macau.

About American Superconductor

American Superconductor Corporation, together with its subsidiaries, provides megawatt-scale power resiliency solutions worldwide. The company operates through Grid and Wind segments. The Grid segment offers products and services that enable electric utilities, industrial facilities, and renewable energy project developers to connect, transmit, and distribute power under the Gridtec Solutions brand. It provides transmission planning services, which identify power grid congestion, poor power quality, and other risks; grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems; D-VAR systems used for controlling power flow and voltage in the AC transmission system; actiVAR system, a fast-switching medium-voltage reactive compensation solution; armorVAR system installed for reactive compensation, power factor correction, loss reduction, utility bill savings, and mitigation of common power quality concerns related to power converter-based generation and load devices; and D-VAR volt var optimization (VVO) that serves the distribution power grid market. This segment also offers ship protection systems, which reduce a naval ship’s magnetic signature; and ON board power delivery systems, power generation systems, and propulsion systems; and transformers and rectifiers systems. The Wind segment designs wind turbine systems and licenses these designs to third parties under the Windtec Solutions brand. It also supplies power electronics and software-based control systems, engineered designs, and support services; and provides customer support services to wind turbine manufacturers. This segment’s design portfolio comprises a range of drivetrains and power ratings of 2 megawatts and higher. American Superconductor Corporation was incorporated in 1987 and is headquartered in Ayer, Massachusetts.