Critical Analysis: SURGE COMPONENT (OTCMKTS:SPRS) and OSI Systems (NASDAQ:OSIS)

SURGE COMPONENT (OTCMKTS:SPRS) and OSI Systems (NASDAQ:OSIS) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Profitability

This table compares SURGE COMPONENT and OSI Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SURGE COMPONENT	2.65%	4.44%	3.43%
OSI Systems	8.73%	18.69%	7.51%

Risk and Volatility

SURGE COMPONENT has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, OSI Systems has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for SURGE COMPONENT and OSI Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SURGE COMPONENT	0	0	0	0	0.00
OSI Systems	0	1	6	0	2.86

OSI Systems has a consensus target price of $247.50, indicating a potential upside of 2.48%. Given OSI Systems’ stronger consensus rating and higher possible upside, analysts plainly believe OSI Systems is more favorable than SURGE COMPONENT.

Institutional and Insider Ownership

89.2% of OSI Systems shares are held by institutional investors. 53.0% of SURGE COMPONENT shares are held by insiders. Comparatively, 5.2% of OSI Systems shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares SURGE COMPONENT and OSI Systems”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SURGE COMPONENT	$31.21 million	0.49	$830,000.00	$0.15	17.47
OSI Systems	$1.71 billion	2.37	$149.64 million	$8.70	27.76

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

Summary

OSI Systems beats SURGE COMPONENT on 13 of the 14 factors compared between the two stocks.

About SURGE COMPONENT

Surge Components, Inc., together with its subsidiaries, supplies electronic products and components. It offers capacitors, which are electrical energy storage devices; and discrete semiconductor components, such as rectifiers, transistors, diodes, circuit protection devices, and audible components comprising audible transducers, Piezo buzzers, speakers, and microphones. The company also provides resonators, alarms, chimes, filters, and discriminators, as well as fuses, printed circuit boards, and switches. Its products are used in the electronic circuitry of various industries, including automotive, computer, communications, cellular telephones, consumer electronics, garage door openers, security equipment, audio equipment, telecom products, computer related products, power supply products, utility meters, and household appliances. The company sells its products to original equipment manufacturers and distributors through independent sales representatives or organizations in Canada, China, other Asian countries, South America, and Europe. Surge Components, Inc. was incorporated in 1981 and is headquartered in Deer Park, New York.

About OSI Systems

OSI Systems, Inc. designs and manufactures electronic systems and components. It operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation monitoring, explosive and narcotics trace detection systems, and optical inspection systems under the Rapiscan name. It also provides site design, installation, training, and technical support services; and turnkey security screening solutions under the S2 name. The Healthcare segment offers patient monitoring, cardiology and remote monitoring, and connected care systems and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC Flexible Circuits names; LCD displays for medical, industrial, and consumer electronics applications; and flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.