Key Tronic (NASDAQ:KTCC) and SMC (OTCMKTS:SMCAY) Financial Contrast

Key Tronic (NASDAQ:KTCC) and SMC (OTCMKTS:SMCAY) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Earnings and Valuation

This table compares Key Tronic and SMC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Key Tronic	$467.87 million	0.07	-$8.32 million	($1.42)	-2.04
SMC	$5.20 billion	5.33	$1.03 billion	$0.84	25.86

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

Profitability

This table compares Key Tronic and SMC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Key Tronic	-3.68%	-5.08%	-1.80%
SMC	19.41%	7.80%	7.08%

Volatility and Risk

Key Tronic has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, SMC has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Key Tronic and SMC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Key Tronic	1	0	0	0	1.00
SMC	0	1	0	0	2.00

Insider and Institutional Ownership

40.7% of Key Tronic shares are held by institutional investors. Comparatively, 1.0% of SMC shares are held by institutional investors. 7.9% of Key Tronic shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

SMC beats Key Tronic on 9 of the 12 factors compared between the two stocks.

About Key Tronic

Key Tronic Corporation provides contract manufacturing services to original equipment manufacturers in the United States and internationally. The company offers integrated electronic and mechanical engineering, assembly, sourcing and procurement, logistics, and new product testing services. Its services include product design; surface mount technologies and pin through hole capability for printed circuit board assembly; tool making; precision plastic molding; sheet metal fabrication and painting; liquid injection molding; complex assembly; prototype design; and full product assembly services. The company manufactures and sells keyboards and other input devices. It markets its products and services primarily through field sales people and distributors. Key Tronic Corporation was incorporated in 1969 and is headquartered in Spokane Valley, Washington.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.