Contrasting Panasonic (PCRFY) and Knowles (KN)

Panasonic (OTCMKTS: PCRFY) and Knowles (NYSE:KN) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Volatility & Risk

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Panasonic has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Knowles has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Insider and Institutional Ownership

0.2% of Panasonic shares are held by institutional investors. 1.0% of Panasonic shares are held by company insiders. Comparatively, 3.7% of Knowles shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Panasonic and Knowles’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Panasonic $67.93 billion 0.50 $1.39 billion $0.60 24.24
Knowles $744.20 million 1.52 $68.30 million $0.70 18.11

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

Dividends

Panasonic pays an annual dividend of $0.07 per share and has a dividend yield of 0.5%. Knowles does not pay a dividend. Panasonic pays out 11.7% of its earnings in the form of a dividend.

Profitability

This table compares Panasonic and Knowles’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Panasonic 2.22% 9.48% 2.80%
Knowles 8.32% 6.28% 4.30%

Analyst Ratings

This is a summary of current ratings and target prices for Panasonic and Knowles, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Panasonic 0 0 1 0 3.00
Knowles 0 1 4 0 2.80

Knowles has a consensus price target of $18.10, indicating a potential upside of 42.74%. Given Knowles’ higher probable upside, analysts clearly believe Knowles is more favorable than Panasonic.

About Panasonic

Panasonic Corporation is engaged in the development of diverse electronics technologies and solutions. The Company operates through five segments: Appliances, Eco Solutions, AVC Networks, Automotive & Industrial Systems, and Other. The Appliances segment is engaged in the development, manufacture and sale of consumer electronics, air-conditioners, cold chain and devices. The Eco Solutions segment is engaged in development, manufacture and sale of lighting fixtures, lamps, wiring devices, solar photovoltaic systems, ventilation and air-conditioning equipment, air purifiers and nursing-care-related products. The AVC Networks segment is engaged in development, manufacture and sale of products, such as aircraft in-flight entertainment systems, personal computers, and social infrastructure systems equipment. The Automotive & Industrial Systems segment is engaged in the development, manufacture and sale of automotive products, energy products, industrial devices and factory solutions.

About Knowles

Knowles Corporation is a global supplier of micro-acoustic, audio processing and specialty component solutions, serving the mobile consumer electronics, communications, medical, military, aerospace and industrial markets. The Company operates through two segments: Mobile Consumer Electronics (MCE) and Specialty Components (SC). MCE designs and manufactures acoustic products, including microphones and audio processing technologies used in mobile handsets, wearables and other consumer electronic devices. SC specializes in the design and manufacture of specialized electronic components used in medical and life science applications, as well as solutions and components used in communications infrastructure and a range of other markets. It has sales, support and engineering facilities in North America, Europe and Asia, and manufacturing facilities in Asia. It also offers acoustics components used in hearing aids, as well as high-end oscillators (timing devices) and capacitors.

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