Analyzing Acorn Energy (NASDAQ:ACFN) and Methode Electronics (NYSE:MEI)

Methode Electronics (NYSE:MEI) and Acorn Energy (NASDAQ:ACFN) are both small-cap technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Institutional & Insider Ownership

95.5% of Methode Electronics shares are owned by institutional investors. 1.9% of Methode Electronics shares are owned by company insiders. Comparatively, 35.6% of Acorn Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Methode Electronics and Acorn Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Methode Electronics	-3.52%	-5.63%	-2.94%
Acorn Energy	16.12%	10.06%	6.32%

Risk and Volatility

Methode Electronics has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Acorn Energy has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Methode Electronics and Acorn Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Methode Electronics	1	3	2	0	2.17
Acorn Energy	0	1	0	0	2.00

Methode Electronics presently has a consensus target price of $22.00, suggesting a potential upside of 51.31%. Given Methode Electronics’ stronger consensus rating and higher probable upside, research analysts clearly believe Methode Electronics is more favorable than Acorn Energy.

Valuation & Earnings

This table compares Methode Electronics and Acorn Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Methode Electronics	$1.04 billion	0.49	-$35.70 million	($1.04)	-13.98
Acorn Energy	$11.48 million	4.16	$2.51 million	$0.61	31.20

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

Summary

Acorn Energy beats Methode Electronics on 8 of the 14 factors compared between the two stocks.

About Methode Electronics

Methode Electronics, Inc. designs, engineers, and produces mechatronic products worldwide. It operates through four segments: Automotive, Industrial, Interface, and Medical. The Automotive segment supplies electronic and electro-mechanical devices, and related products to automobile original equipment manufacturers directly or through their tiered suppliers. Its products include integrated center consoles, hidden and ergonomic switches, transmission lead-frames, complex insert molded solutions, LED-based lighting solutions, and sensors, which incorporate magneto-elastic sensing, eddy current, or other sensing technologies that monitor the operation or status of a component or system. The Industrial segment manufactures external lighting solutions comprising driving, work, and signal lights; industrial safety radio remote controls; braided flexible cables; current-carrying laminated and powder-coated busbars; high-voltage high current connector and contracts; custom power-product assemblies, such as PowerRail solution; and high-current low-voltage flexible power cabling systems that are used in aerospace, cloud computing, commercial vehicles, construction equipment, industrial, military, power conversion, and transportation markets and applications. The Interface segment provides various copper-based transceivers and related accessories for the cloud computing hardware equipment and telecommunications broadband equipment markets; user interface solutions for the appliance, commercial food service, and point-of-sale equipment markets; and fluid-level sensors for the marine/recreational vehicle and sump pump markets. The Medical segment offers Dabir Surfaces, a surface support technology aimed at pressure injury prevention for use by patients who are immobilized or otherwise at risk for pressure injuries, including patients undergoing long-duration surgical procedures. Methode Electronics, Inc. was incorporated in 1946 and is headquartered in Chicago, Illinois.

About Acorn Energy

Acorn Energy, Inc., through its subsidiaries, develops and markets wireless remote monitoring and control systems for various markets in the United States and internationally. It operates through two segments, Power Generation (PG) Monitoring and Cathodic Protection (CP) Monitoring. The PG segment provides wireless remote monitoring and control systems, and services for critical assets, which include stand-by power generators, compressors, pumps, pumpjacks, light towers, turbines, and other industrial equipment; and Internet of Things applications. The CP segment offers remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies. The company was incorporated in 1986 and is based in Wilmington, Delaware.