Contrasting Taitron Components (NASDAQ:TAIT) and Best Buy (NYSE:BBY)

Taitron Components (NASDAQ:TAIT) and Best Buy (NYSE:BBY) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Risk & Volatility

Taitron Components has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Best Buy has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Earnings & Valuation

This table compares Taitron Components and Best Buy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taitron Components	$4.14 million	3.22	$900,000.00	$0.23	9.63
Best Buy	$41.53 billion	0.35	$927.00 million	$4.09	16.64

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

Insider and Institutional Ownership

18.1% of Taitron Components shares are held by institutional investors. Comparatively, 81.0% of Best Buy shares are held by institutional investors. 60.0% of Taitron Components shares are held by insiders. Comparatively, 0.5% of Best Buy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Taitron Components pays an annual dividend of $0.20 per share and has a dividend yield of 9.0%. Best Buy pays an annual dividend of $3.80 per share and has a dividend yield of 5.6%. Taitron Components pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Best Buy pays out 92.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Best Buy has increased its dividend for 22 consecutive years. Taitron Components is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings for Taitron Components and Best Buy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taitron Components	0	0	0	0	0.00
Best Buy	1	10	9	0	2.40

Best Buy has a consensus price target of $86.11, indicating a potential upside of 26.54%. Given Best Buy’s stronger consensus rating and higher possible upside, analysts clearly believe Best Buy is more favorable than Taitron Components.

Profitability

This table compares Taitron Components and Best Buy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taitron Components	1.50%	0.38%	0.36%
Best Buy	2.13%	46.40%	8.86%

Summary

Best Buy beats Taitron Components on 13 of the 17 factors compared between the two stocks.

About Taitron Components

Taitron Components Incorporated engages in the supply of original designed and manufactured (ODM) electronic components, and distribution of brand name electronic components. It distributes discrete semiconductors, commodity integrated circuits, optoelectronic devices, and passive components. The company also offers value-added engineering and turn-key solutions focusing on providing contract electronic manufacturers (CEMs) and original equipment manufacturers (OEMs) with ODM products for their turn-key projects. It serves other electronic distributors, CEMs, and OEMs in the United States, South Korea, China, Taiwan, and internationally. The company has strategic allies with Teamforce Co. Ltd.; Grand Shine Management; and Zowie Technology Corporation. Taitron Components Incorporated was incorporated in 1989 and is headquartered in Valencia, California.

About Best Buy

Best Buy Co., Inc. engages in the retail of technology products in the United States, Canada, and international. Its stores provide computing and mobile phone products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness products, portable audio comprising headphones and portable speakers, and smart home products, as well as home theaters, which includes home theater accessories, soundbars, and televisions. The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, vacuums, and personal care; entertainment products consisting of drones, peripherals, movies, and toys, as well as hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods. In addition, it provides delivery, installation, memberships, repair, set-up, technical support, health-related, and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, Buy Mobile, CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen, Home, TechLiquidators, and Yardbird brands, as well as domain names comprising bestbuy.com, currenthealth.com, lively.com, techliquidators.com, yardbird.com, and bestbuy.ca. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was incorporated in 1966 and is headquartered in Richfield, Minnesota.