Nortech Systems (NASDAQ:NSYS – Get Free Report) and CPS Technologies (NASDAQ:CPSH – Get Free Report) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.
Profitability
This table compares Nortech Systems and CPS Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nortech Systems | -0.21% | -0.76% | -0.34% |
| CPS Technologies | 1.29% | 2.43% | 1.90% |
Risk & Volatility
Nortech Systems has a beta of -0.1, indicating that its stock price is 110% less volatile than the S&P 500. Comparatively, CPS Technologies has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nortech Systems | 1 | 0 | 0 | 0 | 1.00 |
| CPS Technologies | 0 | 2 | 1 | 0 | 2.33 |
CPS Technologies has a consensus price target of $6.00, indicating a potential upside of 26.32%. Given CPS Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe CPS Technologies is more favorable than Nortech Systems.
Institutional and Insider Ownership
3.0% of Nortech Systems shares are owned by institutional investors. Comparatively, 11.2% of CPS Technologies shares are owned by institutional investors. 10.0% of Nortech Systems shares are owned by company insiders. Comparatively, 13.2% of CPS Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Nortech Systems and CPS Technologies”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nortech Systems | $118.37 million | 0.31 | -$250,000.00 | ($0.10) | -131.00 |
| CPS Technologies | $32.60 million | 2.62 | $420,000.00 | $0.03 | 158.33 |
CPS Technologies has lower revenue, but higher earnings than Nortech Systems. Nortech Systems is trading at a lower price-to-earnings ratio than CPS Technologies, indicating that it is currently the more affordable of the two stocks.
Summary
CPS Technologies beats Nortech Systems on 13 of the 14 factors compared between the two stocks.
About Nortech Systems
Nortech Systems Incorporated provides design and manufacturing solutions for electromedical devices, electromechanical systems, assemblies, and components in the United States, Mexico, and China. It offers a range of technical and manufacturing, and support services, including project management, designing, testing, prototyping, manufacturing, supply chain management, and post-market services. The company also provides manufacturing and engineering services for medical devices, printed circuit board assemblies, wire and cable assemblies, and higher-level electromechanical assemblies. In addition, it offers engineering and repair services. The company serves original equipment manufacturers in the medical, aerospace and defense, and industrial markets through business development teams and independent manufacturers' representatives. Nortech Systems Incorporated was founded in 1990 and is headquartered in Maple Grove, Minnesota.
About CPS Technologies
CPS Technologies Corporation provides advanced material solutions to the transportation, automotive, energy, computing/internet, telecommunication, aerospace, defense, and oil and gas markets in the United States, Europe, and Asia. The company offers metal matrix composites such as baseplates for various applications, including motor controllers used in electric trains, subway cars, wind turbines, and hybrid and electric vehicles; hermetic packages for use in radar, satellite, and avionics applications; baseplates and housings used in modules built with wide band gap semiconductors; and lids and heat spreaders for use in internet switches and routers. It also assembles housings and packages that includes metal matrix composite components for hybrid circuits; and produces armor for naval and military applications. The company sells its products to microelectronics systems companies. The company was formerly known as Ceramics Process Systems Corporation and changed its name to CPS Technologies Corporation in March 2007. CPS Technologies Corporation was incorporated in 1984 and is based in Norton, Massachusetts.
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