Critical Review: Omron (OTCMKTS:OMRNY) vs. Frequency Electronics (NASDAQ:FEIM)

Frequency Electronics (NASDAQ:FEIM) and Omron (OTCMKTS:OMRNY) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Analyst Ratings

This is a breakdown of current recommendations for Frequency Electronics and Omron, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frequency Electronics	0	2	1	1	2.75
Omron	0	2	0	0	2.00

Frequency Electronics presently has a consensus price target of $59.67, suggesting a potential upside of 10.00%. Given Frequency Electronics’ stronger consensus rating and higher possible upside, research analysts plainly believe Frequency Electronics is more favorable than Omron.

Profitability

This table compares Frequency Electronics and Omron’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frequency Electronics	3.68%	3.63%	2.49%
Omron	4.04%	3.68%	2.42%

Risk and Volatility

Frequency Electronics has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Omron has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Institutional and Insider Ownership

58.6% of Frequency Electronics shares are owned by institutional investors. Comparatively, 1.1% of Omron shares are owned by institutional investors. 17.3% of Frequency Electronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Frequency Electronics and Omron”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frequency Electronics	$63.23 million	9.67	-$900,000.00	$0.25	216.96
Omron	$5.10 billion	1.20	$188.01 million	$1.05	28.28

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

Summary

Frequency Electronics beats Omron on 9 of the 15 factors compared between the two stocks.

About Frequency Electronics

Frequency Electronics, Inc., together with its subsidiaries, engages in designing, development, and manufacturing of precision time and frequency control products and components for microwave integrated circuit applications. It operates through two segments, FEI-NY and FEI-Zyfer. The FEI-NY segment offers precision time and frequency control products for communication satellites, terrestrial cellular telephone or other ground-based telecommunication stations; and other components and systems for the U.S. military; and provides design and technical support for satellite business. FEI-Zyfer segment offers global positioning system technologies to systems and subsystems for secure communications, both government and commercial, and other locator applications; and engages in sale and support of wireline telecommunications products, including US5G. It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia. Frequency Electronics, Inc. was founded in 1961 and is headquartered in Mitchel Field, New York.

About Omron

OMRON Corporation engages in industrial automation, device and module solutions, social systems, and healthcare businesses worldwide. The Industrial Automation Business offers sensors, switches, safety and control components, relays, motion and drives, robotics, energy conservation, power supplies, and automation system products. It also offers environmental mobility, digital devices, food and commodity, logistic and warehouse automation, medical, robotic, panel, vision, software, and traceability related solutions. The Social Systems, Solutions and Service Business provides energy, public transport, traffic safety, network protection, payment, infrastructure monitoring, management service, and DX solutions, as well as offers remote surveillance/monitoring, automation/robotics, software development, engineering/maintenance, and other services. The Healthcare Business provides cardiovascular, respiratory care, pain management, remote patient monitoring, and other solutions. The Device and Module Solutions Business offers relays, switches, connectors, and sensors. OMRON Corporation was founded in 1933 and is headquartered in Kyoto, Japan.