Critical Survey: CTS (NYSE:CTS) & Surge Component (OTCMKTS:SPRS)

CTS (NYSE:CTS) and Surge Component (OTCMKTS:SPRS) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Valuation and Earnings

This table compares CTS and Surge Component”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CTS	$515.77 million	2.47	$58.11 million	$1.97	22.28
Surge Component	$31.21 million	0.61	$830,000.00	$0.15	21.67

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

Risk and Volatility

CTS has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Surge Component has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500.

Institutional & Insider Ownership

96.9% of CTS shares are held by institutional investors. 1.6% of CTS shares are held by insiders. Comparatively, 56.0% of Surge Component shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for CTS and Surge Component, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CTS	0	1	0	0	2.00
Surge Component	0	0	0	0	0.00

Profitability

This table compares CTS and Surge Component’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CTS	11.14%	11.92%	8.31%
Surge Component	2.56%	4.49%	3.47%

Summary

CTS beats Surge Component on 11 of the 12 factors compared between the two stocks.

About CTS

CTS Corporation manufactures and sells sensors, actuators, and connectivity components in North America, Europe, and Asia. The company provides encoders, rotary position sensors, slide potentiometers, industrial and commercial rotary potentiometers. It also provides non-contacting, and contacting pedals; and eBrake pedals. In addition, the company offers flow meters, hydrophones, non-destructive testing, sonar, ultrasonic imaging, piezoelectric materials, piezoelectric sense products, and bulk products. Further, it provides eMobility, chassis, current sensors, clutch, brake, position sensors, stroke sensor, seating, speed, throttle, transmission, turbo, temperature sensors, and technical related products. Additionally, the company offers DIP, rotary selector, tactile, rotary DIP, and toggle switches, as well as provides transducer related products. Furthermore, it provides EMI, RFI, and RFI products; specialty and resistors; and frequency control products. The company sells and markets its products through its sales engineers, independent manufacturer representatives, and distributors. CTS Corporation was founded in 1896 and is based in Lisle, Illinois.

About Surge Component

Surge Components, Inc., together with its subsidiaries, supplies electronic products and components. It offers capacitors, which are electrical energy storage devices; and discrete semiconductor components, such as rectifiers, transistors, diodes, circuit protection devices, and audible components comprising audible transducers, Piezo buzzers, speakers, and microphones. The company also provides resonators, alarms, chimes, filters, and discriminators, as well as fuses, printed circuit boards, and switches. Its products are used in the electronic circuitry of various industries, including automotive, computer, communications, cellular telephones, consumer electronics, garage door openers, security equipment, audio equipment, telecom products, computer related products, power supply products, utility meters, and household appliances. The company sells its products to original equipment manufacturers and distributors through independent sales representatives or organizations in Canada, China, other Asian countries, South America, and Europe. Surge Components, Inc. was incorporated in 1981 and is headquartered in Deer Park, New York.