TE Connectivity (NYSE:TEL – Get Free Report) and Alps Electric (OTCMKTS:APELY – Get Free Report) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.
Volatility and Risk
TE Connectivity has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Alps Electric has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and price targets for TE Connectivity and Alps Electric, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TE Connectivity | 0 | 5 | 11 | 2 | 2.83 |
| Alps Electric | 1 | 1 | 0 | 0 | 1.50 |
Insider & Institutional Ownership
91.4% of TE Connectivity shares are held by institutional investors. Comparatively, 0.1% of Alps Electric shares are held by institutional investors. 0.9% of TE Connectivity shares are held by insiders. Comparatively, 10.4% of Alps Electric 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.
Dividends
TE Connectivity pays an annual dividend of $2.84 per share and has a dividend yield of 1.2%. Alps Electric pays an annual dividend of $0.47 per share and has a dividend yield of 1.8%. TE Connectivity pays out 46.2% of its earnings in the form of a dividend. Alps Electric pays out 14.6% 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. TE Connectivity has increased its dividend for 12 consecutive years. Alps Electric is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares TE Connectivity and Alps Electric’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TE Connectivity | 10.67% | 21.18% | 10.91% |
| Alps Electric | 4.91% | 5.41% | 3.03% |
Earnings and Valuation
This table compares TE Connectivity and Alps Electric”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TE Connectivity | $17.26 billion | 3.95 | $1.84 billion | $6.15 | 37.68 |
| Alps Electric | $6.50 billion | 0.43 | $249.72 million | $3.23 | 8.24 |
TE Connectivity has higher revenue and earnings than Alps Electric. Alps Electric is trading at a lower price-to-earnings ratio than TE Connectivity, indicating that it is currently the more affordable of the two stocks.
Summary
TE Connectivity beats Alps Electric on 15 of the 18 factors compared between the two stocks.
About TE Connectivity
TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the AsiaPacific, and the Americas. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas, and application tooling products for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; and interventional medical components, relays, heat shrink tubing, and wires and cables for industrial equipment, aerospace, defense, marine, medical, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, relays, heat shrink tubing, and antennas for the data and devices, and appliances markets. The company sells its products to approximately 140 countries primarily through direct sales to manufacturers, as well as through third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was founded in 1941 and is based in Schaffhausen, Switzerland.
About Alps Electric
Alps Alpine Co., Ltd. manufactures and sells electronic components in Japan and internationally. It operates through four segments: Components, Sensor Communication, Module Systems, and Logistics. The company’s products for the consumer, industrial equipment, and IoT markets include TACT switches, worker condition monitoring systems, HAPTIC reactor, actuator for cameras, remote monitoring system for logistics, analog meter monitoring system, resistive position sensor, pressure sensor, air environment sensor module, three-axis geomagnetic sensor, humidity sensor, and pc board mount current sensor. Its products for the automotive market comprises TACT and detector switches, Encoder, aspherical glass lens with metal holder, HAPTIC reactor, trimagic converter, current sensor, magnetic sensor, millimeter-wave sensor, GNSS module, 5G NR module, power window switch, electric shifter, sound system, cabin controller, smart door trim, electric shifter, integrated display, premium sound speakers, and customized car products. The company also provides systems development, office, and financing and leasing services, as well as transportation, storage, and forwarding services. The company was formerly known as Alps Electric Co., Ltd. and changed its name to Alps Alpine Co., Ltd. in January 2019. The company was incorporated in 1948 and is headquartered in Tokyo, Japan.
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