Critical Contrast: Alps Electric (OTCMKTS:APELY) & Deswell Industries (NASDAQ:DSWL)

Deswell Industries (NASDAQ:DSWL) and Alps Electric (OTCMKTS:APELY) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Institutional & Insider Ownership

0.1% of Alps Electric shares are held by institutional investors. 39.0% of Deswell Industries shares are held by company insiders. Comparatively, 10.4% of Alps Electric shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Deswell Industries and Alps Electric”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deswell Industries	$67.61 million	0.78	$11.14 million	$0.48	6.88
Alps Electric	$6.50 billion	0.41	$249.72 million	$3.23	7.97

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

Dividends

Deswell Industries pays an annual dividend of $0.20 per share and has a dividend yield of 6.1%. Alps Electric pays an annual dividend of $0.47 per share and has a dividend yield of 1.8%. Deswell Industries pays out 41.7% 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.

Analyst Recommendations

This is a breakdown of recent recommendations for Deswell Industries and Alps Electric, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deswell Industries	0	0	1	0	3.00
Alps Electric	1	1	0	0	1.50

Profitability

This table compares Deswell Industries and Alps Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Deswell Industries	N/A	N/A	N/A
Alps Electric	4.91%	5.41%	3.03%

Volatility & Risk

Deswell Industries has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Alps Electric has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.

Summary

Alps Electric beats Deswell Industries on 9 of the 15 factors compared between the two stocks.

About Deswell Industries

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers in China, the United States, Europe, Hong Kong, the United Kingdom, Canada, and internationally. It operates through two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue audio mixers, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, wired and wireless audio streaming products, and headphones; printed circuit board assemblies; and medical products. The company was founded in 1987 and is based in Macau.

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.