Sono-Tek (NASDAQ:SOTK – Get Free Report) and CompoSecure (NASDAQ:CMPO – Get Free Report) are both small-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.
Insider & Institutional Ownership
47.9% of Sono-Tek shares are held by institutional investors. Comparatively, 37.6% of CompoSecure shares are held by institutional investors. 5.6% of Sono-Tek shares are held by insiders. Comparatively, 52.1% of CompoSecure shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Sono-Tek and CompoSecure”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sono-Tek | $21.44 million | 5.25 | $1.81 million | $0.13 | 55.08 |
| CompoSecure | $160.68 million | 9.91 | -$53.72 million | ($2.16) | -5.83 |
Sono-Tek has higher earnings, but lower revenue than CompoSecure. CompoSecure is trading at a lower price-to-earnings ratio than Sono-Tek, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Sono-Tek and CompoSecure’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sono-Tek | 9.62% | 10.55% | 8.30% |
| CompoSecure | -24.53% | -65.50% | 26.83% |
Volatility & Risk
Sono-Tek has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500. Comparatively, CompoSecure has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for Sono-Tek and CompoSecure, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sono-Tek | 0 | 1 | 1 | 0 | 2.50 |
| CompoSecure | 0 | 0 | 5 | 0 | 3.00 |
Sono-Tek presently has a consensus target price of $8.50, suggesting a potential upside of 18.72%. CompoSecure has a consensus target price of $26.00, suggesting a potential upside of 106.35%. Given CompoSecure’s stronger consensus rating and higher probable upside, analysts clearly believe CompoSecure is more favorable than Sono-Tek.
Summary
CompoSecure beats Sono-Tek on 8 of the 14 factors compared between the two stocks.
About Sono-Tek
Sono-Tek Corporation designs and manufactures ultrasonic coating systems for applying on parts and components for the microelectronics/electronics, alternative energy, medical, industrial, and research and development/other markets worldwide. The company also designs and manufactures custom-engineered ultrasonic coating systems; and provides nozzles and generators for manufacturers' equipment. Its products include integrated multi-axis coating systems, integrated coating systems, fluxing systems, OEM systems, and other related systems. In addition, the company provides surface coating solutions and application consulting services. It markets and distributes its products through direct sales personnel, select independent distributors, and sales representatives. The company was incorporated in 1975 and is based in Milton, New York.
About CompoSecure
CompoSecure, Inc. manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.
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