NetGear (NASDAQ: NTGR) and Fabrinet (NYSE:FN) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.
Insider & Institutional Ownership
Get NetGear alerts:97.5% of NetGear shares are held by institutional investors. Comparatively, 97.7% of Fabrinet shares are held by institutional investors. 5.1% of NetGear shares are held by company insiders. Comparatively, 3.3% of Fabrinet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Volatility and Risk
NetGear has a beta of 1.9, indicating that its stock price is 90% more volatile than the S&P 500. Comparatively, Fabrinet has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations for NetGear and Fabrinet, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NetGear | 0 | 0 | 3 | 0 | 3.00 |
| Fabrinet | 0 | 2 | 3 | 1 | 2.83 |
NetGear currently has a consensus price target of $71.00, suggesting a potential upside of 8.65%. Fabrinet has a consensus price target of $40.67, suggesting a potential upside of 12.28%. Given Fabrinet’s higher probable upside, analysts clearly believe Fabrinet is more favorable than NetGear.
Earnings & Valuation
This table compares NetGear and Fabrinet’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NetGear | $1.41 billion | 1.47 | $19.43 million | $2.32 | 28.17 |
| Fabrinet | $1.42 billion | 0.94 | $97.11 million | $2.57 | 14.09 |
Fabrinet has higher revenue and earnings than NetGear. Fabrinet is trading at a lower price-to-earnings ratio than NetGear, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares NetGear and Fabrinet’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NetGear | 0.63% | 9.63% | 6.23% |
| Fabrinet | 6.36% | 12.48% | 8.52% |
Summary
Fabrinet beats NetGear on 9 of the 14 factors compared between the two stocks.
About NetGear
NETGEAR, Inc. designs, develops, and markets networking and Internet connected products for consumers, businesses, and service providers. The company operates in three segments: Arlo, Connected Home, and Small and Medium Business. It offers smart home/connected home/broadband access products, such as remote video security systems, broadband modems, WiFi gateways, WiFi hotspots, WiFi routers and home WiFi systems, WiFi range extenders, Powerline adapters and bridges, and WiFi network adapters. The company also provides Ethernet switches, wireless controllers and access points, unified storage products, and Internet security appliances for small and medium-sized businesses. It markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers in the Americas, Europe, the Middle-East, Africa, and the Asia Pacific. NETGEAR, Inc. was founded in 1996 and is headquartered in San Jose, California.
About Fabrinet
Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, medical devices, and sensors. It offers a range of optical and electro-mechanical capabilities across the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, packaging, integration, final assembly, and test. The company's products comprise switching products, such as reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths and speeds, and over various distances; tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as for Infiniband, Ethernet, fiber channel, and optical backplane connectivity. It also offers solid state, diode-pumped, gas, and fiber lasers used across semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and sensors, such as differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. In addition, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, and laser components and substrates, as well as other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It has operations in North America, the Asia-Pacific, and Europe. The company was incorporated in 1999 and is based in George Town, the Cayman Islands.
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