Critical Analysis: Stoneridge (NYSE:SRI) vs. Ultralife (NASDAQ:ULBI)

Ultralife (NASDAQ:ULBI) and Stoneridge (NYSE:SRI) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Profitability

This table compares Ultralife and Stoneridge’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ultralife	1.79%	2.68%	1.74%
Stoneridge	-3.39%	-9.24%	-3.69%

Insider & Institutional Ownership

30.7% of Ultralife shares are held by institutional investors. Comparatively, 98.1% of Stoneridge shares are held by institutional investors. 40.0% of Ultralife shares are held by insiders. Comparatively, 2.9% of Stoneridge shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Ultralife and Stoneridge”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultralife	$164.46 million	0.70	$6.31 million	$0.19	36.16
Stoneridge	$908.29 million	0.23	-$16.52 million	($1.08)	-7.04

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Ultralife and Stoneridge, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultralife	0	1	1	0	2.50
Stoneridge	1	0	1	0	2.00

Ultralife currently has a consensus price target of $14.00, suggesting a potential upside of 103.78%. Stoneridge has a consensus price target of $16.00, suggesting a potential upside of 110.53%. Given Stoneridge’s higher probable upside, analysts clearly believe Stoneridge is more favorable than Ultralife.

Risk & Volatility

Ultralife has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Stoneridge has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Summary

Ultralife beats Stoneridge on 9 of the 13 factors compared between the two stocks.

About Ultralife

Ultralife Corporation, together with its subsidiaries, designs, manufactures, installs, and maintains power, and communication and electronics systems worldwide. The company operates in two segments, Battery & Energy Products and Communications Systems. The Battery & Energy Products segment offers lithium 9-volt, cylindrical, thin lithium manganese dioxide, rechargeable, and other non-rechargeable batteries; lithium-ion cells, multi-kilowatt module lithium-ion battery systems, and uninterruptable power supplies; and rugged military and commercial battery charging systems and accessories, including smart chargers, multi-bay charging systems, and various cables. The Communications Systems segment provides communications systems and accessories to support military communications systems, such as radio frequency amplifiers, power supplies and cables, connector assemblies, amplified speakers, equipment mounts, case equipment, man-portable systems, and integrated communication systems for fixed or vehicle applications comprising vehicle adapters, vehicle installed power enhanced rifleman appliqué systems, and SATCOM systems. This segment's military communications systems and accessories are designed to enhance and extend the operation of communications equipment, such as vehicle-mounted, manpack, and handheld transceivers. The company sells its products under the Ultralife, Ultralife HiRate, Ultralife Thin Cell, Ultralife Batteries, Lithium Power, McDowell Research, AMTITM, ABLETM, ACCUTRONICS, ACCUPRO, ENTELLION, SWE Southwest Electronic Energy Group, SWE SEASAFE, Excell Battery Group, and Criterion Gauge brands through original equipment manufacturers, and industrial and defense supply distributors. In addition, it sells its 9-volt battery to the broader consumer market through national and regional retail chains and online retailers. It serves government, defense, and commercial sectors. The company was incorporated in 1990 and is headquartered in Newark, New York.

About Stoneridge

Stoneridge, Inc., together with its subsidiaries, designs and manufactures engineered electrical and electronic systems, components, and modules for the automotive, commercial, off-highway, motorcycle, and agricultural vehicle markets in North America, South America, Europe, and internationally. The company operates through three segments: Control Devices, Electronics, and Stoneridge Brazil. The Control Devices segment offers actuators, sensors, switches, actuators, and connectors that monitor, measure, or activate specific functions within a vehicle. The Electronics segment designs and manufactures driver information systems, vision and safety systems, connectivity and compliance products, and electronic control units. Its products collect, store, and display vehicle information, such as speed, pressure, maintenance data, trip information, operator performance, temperature, distance traveled, and driver messages related to vehicle performance. This segment also offers electronic control units that regulate, coordinate, monitor, and direct the operation of the electrical system within a vehicle. The Stoneridge Brazil segment designs, manufactures, and sells vehicle tracking devices and monitoring services; vehicle security alarms and convenience accessories, including parking sensors and rearview cameras; in-vehicle audio and infotainment devices; and driver information systems and telematics solutions. The company provides its products and systems to various original equipment manufacturers and tier 1 customers, as well as aftermarket distributors. Stoneridge, Inc. was founded in 1965 and is headquartered in Novi, Michigan.