Head to Head Comparison: Fabrinet (NYSE:FN) versus CSP (NASDAQ:CSPI)

Fabrinet (NYSE:FN) and CSP (NASDAQ:CSPI) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Institutional and Insider Ownership

97.4% of Fabrinet shares are owned by institutional investors. Comparatively, 26.7% of CSP shares are owned by institutional investors. 0.2% of Fabrinet shares are owned by company insiders. Comparatively, 15.0% of CSP shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Fabrinet has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, CSP has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Profitability

This table compares Fabrinet and CSP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fabrinet	10.19%	21.23%	13.96%
CSP	-1.22%	-1.56%	-0.99%

Earnings & Valuation

This table compares Fabrinet and CSP”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fabrinet	$4.64 billion	2.75	$473.03 million	$13.05	27.32
CSP	$58.73 million	1.28	-$90,000.00	($0.07)	-106.86

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Fabrinet and CSP, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fabrinet	0	3	6	1	2.80
CSP	1	0	0	0	1.00

Fabrinet currently has a consensus price target of $650.62, indicating a potential upside of 82.51%. Given Fabrinet’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Fabrinet is more favorable than CSP.

Summary

Fabrinet beats CSP on 13 of the 14 factors compared between the two stocks.

About Fabrinet

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe. The company offers a range of advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing. Its products include switching products, including reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths, speeds, and over various distances. The company's products also comprise tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel, and optical backplane connectivity. In addition, it provides solid state, diode-pumped, gas, and fiber lasers used in semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. Further, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, laser components, and substrates; and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors. The company was incorporated in 1999 and is based in Grand Cayman, the Cayman Islands.

About CSP

CSP Inc. develops and markets IT integration solutions, security products, managed IT services, cloud services, purpose-built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value-added reseller to various customers in web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as planning, designing, assessment, implementation, migration, optimization, and project management; storage and virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; and IT security compliance services. In addition, this segment provides unified communications, wireless, and routing and switching solutions; custom software applications and solutions development and support services; optimization, maintenance, and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT, as well as IT security support tasks. Further, this segment offers managed and cloud services, such as proactive monitoring and remote management of IT infrastructure, managed and hosted unified communication services, security, and backup and replication. The High Performance Products segment offers ARIA Software-Defined Security, a cybersecurity solution; ARIA Zero Trust PROTECT that stopping the attacks that are used to attack critical infrastructure applications; Myricom network adapters; and multicomputer products for digital signal processing applications in the defense markets. CSP Inc. was incorporated in 1968 and is headquartered in Lowell, Massachusetts.