Contrasting AUO (OTCMKTS:AUOTY) & nVent Electric (NYSE:NVT)

AUO (OTCMKTS:AUOTY) and nVent Electric (NYSE:NVT) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider and Institutional Ownership

90.1% of nVent Electric shares are held by institutional investors. 16.0% of AUO shares are held by insiders. Comparatively, 1.7% of nVent Electric shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares AUO and nVent Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AUO	2.06%	3.58%	1.48%
nVent Electric	11.37%	16.82%	9.03%

Dividends

AUO pays an annual dividend of $0.30 per share and has a dividend yield of 4.0%. nVent Electric pays an annual dividend of $0.84 per share and has a dividend yield of 0.5%. AUO pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. nVent Electric pays out 27.9% of its earnings in the form of a dividend. nVent Electric has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares AUO and nVent Electric”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AUO	$9.04 billion	0.63	$219.80 million	$0.24	30.92
nVent Electric	$4.33 billion	6.21	$710.20 million	$3.01	55.19

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

Volatility & Risk

AUO has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, nVent Electric has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for AUO and nVent Electric, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AUO	0	0	0	0	0.00
nVent Electric	0	1	11	2	3.07

nVent Electric has a consensus target price of $187.27, indicating a potential upside of 12.73%. Given nVent Electric’s stronger consensus rating and higher possible upside, analysts plainly believe nVent Electric is more favorable than AUO.

Summary

nVent Electric beats AUO on 15 of the 18 factors compared between the two stocks.

About AUO

AUO Corporation researches, develops, produces, and sells thin film transistor liquid crystal displays (TFT-LCDs) and other flat panel displays for various applications. It operates through two segments, Display and Energy. The company designs, manufactures, and sells ingots, solar wafers, and solar modules, as well as provides technical engineering and maintenance services for solar system projects. It also sells and leases content management system and related hardware; designs digital signage content and field curation solutions; plans, designs, and develops construction project for environmental protection and related project management; and designs, manufactures, and sells TFT-LCD modules, TV sets and related parts, backlight modules, automotive parts, and precision plastic parts. In addition, the company engages in the development, manufacturing, and sale of medical equipment; services related to site rental and educational activities; research and development, and IP related business; solar power generation; and sale and sales support of TFTLCD panels. Further, it designs, develops, and sells software and hardware for health care industry; provides software and hardware integration system and equipment relating to intelligent manufacturing, as well as software development and related consulting services; and investment services. It operates in the People's Republic of China, Taiwan, the United States, Japan, Singapore, and internationally. The company was formerly known as AU Optronics Corp. and changed its name to AUO Corporation in June 2022. AUO Corporation was founded in 1996 and is headquartered in Hsinchu City, Taiwan.

About nVent Electric

nVent Electric plc, together with its subsidiaries, designs, manufactures, markets, installs, and services electrical connection and protection solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company operates through three segments: Enclosures, Electrical & Fastening Solutions, and Thermal Management. The Enclosures segment provides solutions to protect electronics and data in mission critical applications, including data solutions. This segment also offers digital and automation solutions, system integrations, and global services. The Electrical & Fastening Solutions segment provides solutions that connect and protect power and data infrastructure. This segment also offers power connections, fastening solutions, cable management solutions, grounding and bonding systems, and tools and test instruments. The Thermal Management segment offers heat management solutions that protect people and assets. This segment includes heat tracing for freeze protection and process temperature maintenance and control; pipe freeze protection, surface deicing, hot water temperature maintenance, floor heating, fire-rated wiring, and leak detection; and heat trace systems, connected controls, remote monitoring, and annual service programs. The company markets its products through electrical distributors, contractors, and original equipment manufacturers under the CADDY, ERICO, GARDNER BENDER, HOFFMAN, ILSCO, RAYCHEM, SCHROFF, and TRACER brand names. Its products are used for various applications, such as industrial, commercial and residential, infrastructure, and energy. nVent Electric plc was founded in 1903 and is based in London, the United Kingdom.