Critical Review: Fabrinet (NYSE:FN) versus Omron (OTCMKTS:OMRNY)

Fabrinet (NYSE:FN) and Omron (OTCMKTS:OMRNY) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Earnings and Valuation

This table compares Fabrinet and Omron”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fabrinet	$3.42 billion	5.21	$332.53 million	$9.71	51.19
Omron	$5.26 billion	1.00	$107.39 million	$0.97	26.28

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fabrinet	9.77%	18.16%	12.86%
Omron	3.47%	3.01%	2.06%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Fabrinet and Omron, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fabrinet	0	3	7	0	2.70
Omron	1	0	0	0	1.00

Fabrinet currently has a consensus price target of $474.63, indicating a potential downside of 4.52%. Given Fabrinet’s stronger consensus rating and higher possible upside, research analysts clearly believe Fabrinet is more favorable than Omron.

Risk and Volatility

Fabrinet has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Omron has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Institutional and Insider Ownership

97.4% of Fabrinet shares are owned by institutional investors. Comparatively, 1.1% of Omron shares are owned by institutional investors. 0.2% of Fabrinet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Fabrinet beats Omron 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 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.