Jabil Inc. (NYSE:JBL) and TTM Technologies, Inc. (NYSE:TTMI) are both Technology companies that recently hit new highs. Many investors are wondering what to do with these names trading at such extreme levels. To determine if one is a better investment than the other, we will compare the two across growth, profitability, risk, return, dividends, and valuation measures.
Jabil Inc. (NYSE:JBL) operates in the Printed Circuit Boards segment of the Technology sector. The company has grown sales at a 3.40% annual rate over the past five years, putting it in the low growth category. JBL has a net profit margin of 0.50% and is more profitable than the average company in the Printed Circuit Boards industry. In terms of efficiency, JBL has an asset turnover ratio of 1.88. This figure represents the amount of revenue a company generates per dollar of assets. JBL’s financial leverage ratio is 3.92, which indicates that the company’s asset base is primarily funded by debt. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 4.50%, which is better than the Printed Circuit Boards industry average ROE.
Jabil Inc. (JBL) pays out an annual dividend of 0.32 per share. At the current valuation, this equates to a dividend yield of 1.22%. The company has a payout ratio of 54.30%. JBL’s current dividend therefore should be sustainable. Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is -6.12. All else equal, companies with higher FCF yields are viewed as cheaper. Company trades at a P/E ratio of 45.44, and is more expensive than the average stock in the Printed Circuit Boards industry. The average investment recommendation for JBL, taken from a group of Wall Street Analysts, is 2.60, or a hold.
Over the past three months, Jabil Inc. insiders have been net sellers, acquiring a net of 309,053 shares. This implies that insiders have been feeling relatively bullish about the outlook for JBL. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. JBL has a beta of 0.47 and therefore an below average level of market volatility.
TTM Technologies, Inc. (NASDAQ:TTMI) operates in the Printed Circuit Boards segment of the Technology sector. TTMI has increased sales at a 12.10% CAGR over the past five years, and is considered a high growth stock. The company has a net profit margin of 2.90% and is more profitable than the average Printed Circuit Boards player. TTMI’s asset turnover ratio is 1.02 and the company has financial leverage of 1.82. TTMI’s return on equity of 8.70% is better than the Printed Circuit Boards industry average.
Stock has a payout ratio of 0.00%. According to this ratio, TTMI should be able to continue making payouts at these levels. The company trades at a free cash flow yield of 0 and has a P/E of 25.89. Compared to the average company in the 21.28 space, TTMI is relatively expensive. The average analyst recommendation for TTMI is 1.40, or a strong buy. The average analyst recommendation for TTMI is 1.40, or a strong buy.
TTM Technologies, Inc. insiders have sold a net of -3,000 shares during the past three months, which implies that the company’s top executives have been feeling bearish about the stock’s outlook. Finally, TTMI’s beta of 1.58 indicates that the stock has an below average level of market risk.
Jabil Inc. (NASDAQ:TTMI) scores higher than TTM Technologies, Inc. (NYSE:JBL) on 8 of the 13 measures compared between the two companies. TTMI has the better fundamentals, scoring higher on growth, profitability, leverage and return metrics. TTMI wins on valuation measures.