Critical Contrast: Garmin (NYSE:GRMN) versus Universal Electronics (NASDAQ:UEIC)

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

Risk and Volatility

Universal Electronics has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Garmin has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Institutional and Insider Ownership

79.4% of Universal Electronics shares are held by institutional investors. Comparatively, 81.6% of Garmin shares are held by institutional investors. 10.5% of Universal Electronics shares are held by insiders. Comparatively, 15.4% of Garmin shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Universal Electronics and Garmin”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Electronics	$394.88 million	0.14	-$24.03 million	($1.67)	-2.49
Garmin	$6.30 billion	6.21	$1.41 billion	$8.12	25.03

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

Analyst Ratings

This is a summary of current ratings and price targets for Universal Electronics and Garmin, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Electronics	1	2	0	0	1.67
Garmin	1	2	2	1	2.50

Universal Electronics presently has a consensus target price of $5.75, suggesting a potential upside of 38.55%. Garmin has a consensus target price of $244.40, suggesting a potential upside of 20.27%. Given Universal Electronics’ higher possible upside, equities research analysts clearly believe Universal Electronics is more favorable than Garmin.

Profitability

This table compares Universal Electronics and Garmin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Electronics	-5.64%	-0.68%	-0.33%
Garmin	22.63%	19.42%	15.73%

Summary

Garmin beats Universal Electronics on 13 of the 15 factors compared between the two stocks.

About Universal Electronics

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.