Analyzing Universal Electronics (NASDAQ:UEIC) and Sigma Lithium (NASDAQ:SGML)

Universal Electronics (NASDAQ:UEIC) and Sigma Lithium (NASDAQ:SGML) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Profitability

This table compares Universal Electronics and Sigma Lithium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Electronics	-5.54%	0.41%	0.21%
Sigma Lithium	-41.84%	-57.50%	-13.50%

Earnings and Valuation

This table compares Universal Electronics and Sigma Lithium”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Electronics	$355.00 million	0.19	-$18.60 million	($1.50)	-3.57
Sigma Lithium	$110.01 million	11.70	-$50.19 million	($0.39)	-29.31

Universal Electronics has higher revenue and earnings than Sigma Lithium. Sigma Lithium is trading at a lower price-to-earnings ratio than Universal Electronics, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

79.3% of Universal Electronics shares are held by institutional investors. Comparatively, 64.9% of Sigma Lithium shares are held by institutional investors. 17.1% of Universal Electronics shares are held by insiders. Comparatively, 48.6% of Sigma Lithium shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Universal Electronics has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Sigma Lithium has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Universal Electronics and Sigma Lithium, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Electronics	1	2	0	0	1.67
Sigma Lithium	2	1	3	0	2.17

Universal Electronics currently has a consensus target price of $4.25, indicating a potential downside of 20.63%. Sigma Lithium has a consensus target price of $18.50, indicating a potential upside of 61.85%. Given Sigma Lithium’s stronger consensus rating and higher possible upside, analysts plainly believe Sigma Lithium is more favorable than Universal Electronics.

Summary

Universal Electronics beats Sigma Lithium on 8 of the 14 factors compared between the two stocks.

About Universal Electronics

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.

About Sigma Lithium

Sigma Lithium Corporation engages in the exploration and development of lithium deposits in Brazil. It holds a 100% interest in the Grota do Cirilo, Genipapo, Santa Clara, and São José properties comprising 29 mineral rights covering an area of approximately 185 square kilometers located in the Araçuaí and Itinga regions of the state of Minas Gerais, Brazil. It serves electric vehicle industries worldwide. The company was formerly known as Sigma Lithium Resources Corporation and changed its name to Sigma Lithium Corporation in July 2021. The company is headquartered in São Paulo, Brazil.