Critical Review: Garmin (NYSE:GRMN) versus Spruce Power (NYSE:SPRU)

Garmin (NYSE:GRMN) and Spruce Power (NYSE:SPRU) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

This table compares Garmin and Spruce Power’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Garmin	22.63%	19.42%	15.73%
Spruce Power	-23.23%	-18.56%	-2.84%

Valuation & Earnings

This table compares Garmin and Spruce Power”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garmin	$6.94 billion	5.49	$1.41 billion	$8.12	24.43
Spruce Power	$82.11 million	1.03	-$70.49 million	($4.21)	-1.12

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Garmin and Spruce Power, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garmin	2	1	1	1	2.20
Spruce Power	1	0	0	0	1.00

Garmin currently has a consensus price target of $239.50, suggesting a potential upside of 20.75%. Given Garmin’s stronger consensus rating and higher probable upside, analysts plainly believe Garmin is more favorable than Spruce Power.

Volatility & Risk

Garmin has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Spruce Power has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500.

Institutional & Insider Ownership

81.6% of Garmin shares are owned by institutional investors. Comparatively, 20.8% of Spruce Power shares are owned by institutional investors. 19.5% of Garmin shares are owned by insiders. Comparatively, 12.7% of Spruce Power shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Garmin beats Spruce Power on 14 of the 15 factors compared between the two stocks.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.

About Spruce Power

Spruce Power Holding Corporation owns and operates distributed solar energy assets in the United States. The company provides subscription-based services for homeowners and businesses to own and maintain rooftop solar and battery storage. It offers its subscription-based services to approximately 75,000 customers. The company is headquartered in Denver, Colorado.