Sono-Tek (NASDAQ:SOTK) & Toro (NYSE:TTC) Critical Analysis

Toro (NYSE:TTC) and Sono-Tek (NASDAQ:SOTK) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Volatility and Risk

Toro has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Sono-Tek has a beta of -0.1, suggesting that its share price is 110% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Toro and Sono-Tek, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toro	0	3	3	0	2.50
Sono-Tek	0	2	1	0	2.33

Toro presently has a consensus target price of $111.67, indicating a potential upside of 4.27%. Sono-Tek has a consensus target price of $7.75, indicating a potential upside of 82.65%. Given Sono-Tek’s higher possible upside, analysts clearly believe Sono-Tek is more favorable than Toro.

Earnings and Valuation

This table compares Toro and Sono-Tek”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toro	$4.51 billion	2.25	$316.10 million	$3.74	28.63
Sono-Tek	$20.91 million	3.20	$1.81 million	$0.12	35.36

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

Insider & Institutional Ownership

88.0% of Toro shares are held by institutional investors. Comparatively, 47.9% of Sono-Tek shares are held by institutional investors. 1.9% of Toro shares are held by insiders. Comparatively, 5.6% of Sono-Tek shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Toro and Sono-Tek’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toro	7.64%	31.86%	12.35%
Sono-Tek	9.32%	9.95%	7.81%

Summary

Toro beats Sono-Tek on 9 of the 14 factors compared between the two stocks.

About Toro

The Toro Company designs, manufactures and markets equipment and services for maintaining outdoor environments. Its products serve homeowners and professional customers in areas such as landscaping, golf course and sports-field maintenance, and snow and ice management. The company’s offerings include lawn mowers, turf and landscape maintenance equipment, irrigation systems, utility and underground construction equipment, and snow removal products. Its portfolio includes brands such as Toro, Exmark and Ditch Witch.

About Sono-Tek

Sono-Tek Corporation is a precision technology company that designs and manufactures ultrasonic coating and spraying systems. Its equipment uses high-frequency ultrasonic energy to atomize liquids into controlled, uniform sprays, enabling manufacturers to apply thin films, coatings and other materials with minimal overspray and waste. The company offers ultrasonic spray nozzles, integrated coating systems, precision liquid-dispensing equipment and automated or robotic platforms. Its technologies are used in applications including medical devices, electronics, fuel cells, solar and alternative-energy products, glass and other industrial components.