Avnet (NASDAQ:AVT) vs. Rubicon Technology (NASDAQ:RBCN) Critical Review

Avnet (NASDAQ:AVT) and Rubicon Technology (NASDAQ:RBCN) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Dividends

Avnet pays an annual dividend of $1.32 per share and has a dividend yield of 2.4%. Rubicon Technology pays an annual dividend of $11.00 per share and has a dividend yield of 628.6%. Avnet pays out 34.6% of its earnings in the form of a dividend. Rubicon Technology pays out 5,789.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avnet has raised its dividend for 12 consecutive years.

Earnings and Valuation

This table compares Avnet and Rubicon Technology”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avnet	$23.76 billion	0.20	$498.70 million	$3.82	14.33
Rubicon Technology	$3.88 million	1.07	-$10,000.00	$0.19	9.21

Avnet has higher revenue and earnings than Rubicon Technology. Rubicon Technology is trading at a lower price-to-earnings ratio than Avnet, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

95.8% of Avnet shares are owned by institutional investors. Comparatively, 0.0% of Rubicon Technology shares are owned by institutional investors. 1.5% of Avnet shares are owned by company insiders. Comparatively, 3.6% of Rubicon Technology shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Avnet and Rubicon Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avnet	1.51%	8.46%	3.37%
Rubicon Technology	-29.90%	-122.29%	-47.56%

Risk & Volatility

Avnet has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Rubicon Technology has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Avnet and Rubicon Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avnet	2	2	0	0	1.50
Rubicon Technology	0	0	0	0	0.00

Avnet currently has a consensus target price of $48.50, indicating a potential downside of 11.42%. Given Avnet’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Avnet is more favorable than Rubicon Technology.

Summary

Avnet beats Rubicon Technology on 13 of the 16 factors compared between the two stocks.

About Avnet

Avnet, Inc., distributes electronic component technology. The company operates through two segments, Electronic Components and Farnell. The Electronic Components segment markets, sells, and distributes semiconductors; interconnect, passive, and electromechanical components; and other integrated components from electronic component manufacturers. It also offers design chain support that provides engineers with technical design solutions; engineering and technical resources to support product design, bill of materials development, and technical education and training; and supply chain solutions that provide support and logistical services to original equipment manufacturers, electronic manufacturing service providers, and electronic component manufacturers. In addition, this segment provides embedded solutions, such as technical design, integration, and assembly of embedded products, systems, and solutions primarily for industrial applications, as well as embedded display solutions comprising touch and passive displays; and develops and manufactures standard board and industrial subsystems, and application-specific devices that enable it to produce systems tailored to specific customer requirements. This segment serves various markets, such as automotive, medical, defense, aerospace, telecommunications, industrial, and digital editing. The Farnell segment distributes kits, tools, and electronic and industrial automation components, as well as test and measurement products to engineers and entrepreneurs. It has operations in the Americas, Europe, the Middle East, Africa, and Asia. Avnet, Inc. was founded in 1921 and is headquartered in Phoenix, Arizona.

About Rubicon Technology

Rubicon Technology, Inc. provides monocrystalline sapphire for applications in optical and industrial systems in North America, Asia, and internationally. The company offers optical and industrial sapphire products in various shapes and sizes, including sheets, rods, tubes, core, ingots, and prisms for a range of end markets comprising defense and aerospace, specialty lighting, instrumentation, sensors and detectors, semiconductor process equipment, electronic substrates, medical, and laser applications. It serves defense subcontractors, industrial manufacturers, fabricators, and resellers. The company was incorporated in 2001 and is based in Bensenville, Illinois.