Analyzing Richardson Electronics (NASDAQ:RELL) and Rubicon Technology (NASDAQ:RBCN)

Richardson Electronics (NASDAQ:RELL) and Rubicon Technology (NASDAQ:RBCN) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Earnings & Valuation

This table compares Richardson Electronics and Rubicon Technology”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Richardson Electronics	$196.46 million	1.04	$60,000.00	($0.05)	-283.20
Rubicon Technology	$3.88 million	1.07	-$10,000.00	$0.19	9.21

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

Dividends

Richardson Electronics pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. Rubicon Technology pays an annual dividend of $11.00 per share and has a dividend yield of 628.6%. Richardson Electronics pays out -480.0% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Richardson Electronics	-0.40%	-0.24%	-0.20%
Rubicon Technology	-29.90%	-122.29%	-47.56%

Institutional and Insider Ownership

72.0% of Richardson Electronics shares are owned by institutional investors. Comparatively, 0.0% of Rubicon Technology shares are owned by institutional investors. 32.8% of Richardson Electronics 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 hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Richardson Electronics has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, Rubicon Technology has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Richardson Electronics and Rubicon Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Richardson Electronics	0	0	1	0	3.00
Rubicon Technology	0	0	0	0	0.00

Richardson Electronics presently has a consensus target price of $13.00, indicating a potential downside of 8.19%. Given Richardson Electronics’ stronger consensus rating and higher possible upside, analysts plainly believe Richardson Electronics is more favorable than Rubicon Technology.

Summary

Richardson Electronics beats Rubicon Technology on 12 of the 16 factors compared between the two stocks.

About Richardson Electronics

Richardson Electronics, Ltd. engages in the provision of engineered solutions, power grid and microwave tube, and related consumables worldwide. The Power and Microwave Technologies segment manufactures electron tubes and radio frequency (RF), microwave and power components used in semiconductor manufacturing equipment, RF, and wireless and industrial power applications, as well as various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology. This segment also provides thyratrons and rectifiers, power tubes, ignitrons, magnetrons, phototubes, microwave generators, ultracapacitor modules, and liquid crystal display monitors under the Amperex, Cetron, and National brands. The Green Energy Solutions segment offers design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket, and technical service and repair services for various applications, such as wind, solar, hydrogen, and electric vehicles; and other power management applications that support green solutions including synthetic diamond manufacturing. The Canvys segment provides custom display solutions, which includes touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages, and certification services. The Healthcare segment provides diagnostic imaging replacement parts for CT and MRI systems, replacement CT and MRI tubes, CT service training, MRI and RF amplifiers, hydrogen thyratrons, klystrons, magnetrons, flat panel detector upgrades, pre-owned CT systems, and additional replacement solutions. It serves energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The company was founded in 1947 and is headquartered in LaFox, Illinois.

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.