Critical Contrast: Universal Display (NASDAQ:OLED) & CTS (NYSE:CTS)

CTS (NYSE:CTS) and Universal Display (NASDAQ:OLED) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Dividends

CTS pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Universal Display pays an annual dividend of $1.80 per share and has a dividend yield of 1.5%. CTS pays out 8.1% of its earnings in the form of a dividend. Universal Display pays out 38.8% 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. Universal Display has raised its dividend for 8 consecutive years. Universal Display is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

CTS has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Universal Display has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500.

Profitability

This table compares CTS and Universal Display’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%
Universal Display	34.65%	14.10%	12.53%

Earnings and Valuation

This table compares CTS and Universal Display”s top-line revenue, earnings per share 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
Universal Display	$647.68 million	8.94	$222.08 million	$4.64	26.26

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

Analyst Ratings

This is a summary of recent ratings for CTS and Universal Display, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CTS	0	1	0	0	2.00
Universal Display	0	4	3	0	2.43

Universal Display has a consensus price target of $177.60, indicating a potential upside of 45.75%. Given Universal Display’s stronger consensus rating and higher possible upside, analysts clearly believe Universal Display is more favorable than CTS.

Insider & Institutional Ownership

96.9% of CTS shares are owned by institutional investors. Comparatively, 78.2% of Universal Display shares are owned by institutional investors. 1.6% of CTS shares are owned by insiders. Comparatively, 2.0% of Universal Display shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Universal Display beats CTS on 15 of the 17 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 Universal Display

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications in the United States and internationally. The company offers PHOLED technologies and materials for displays and lighting products under the UniversalPHOLED brand. It is also involved in the research, development, and commercialization of other OLED device and manufacturing technologies, including FOLED that are flexible OLEDs for the fabrication of OLEDs on flexible substrates; and OVJP, an organic vapor jet printing technology. In addition, the company provides technology development and support services, including third-party collaboration and support to third parties for the commercialization of their OLED products; and contract research services in the areas of chemical synthesis research, development, and commercialization for non-OLED applications, as well as engages in the intellectual property and technology licensing activities. Universal Display Corporation was founded in 1985 and is headquartered in Ewing, New Jersey.