Contrasting Sono-Tek (NASDAQ:SOTK) and Toro (NYSE:TTC)

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

Volatility and Risk

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Sono-Tek and Toro, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sono-Tek	0	1	2	0	2.67
Toro	0	3	3	0	2.50

Sono-Tek currently has a consensus target price of $7.75, suggesting a potential upside of 78.57%. Toro has a consensus target price of $111.67, suggesting a potential upside of 6.11%. Given Sono-Tek’s stronger consensus rating and higher probable upside, analysts plainly believe Sono-Tek is more favorable than Toro.

Profitability

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

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sono-Tek	$20.91 million	3.27	$1.81 million	$0.12	36.17
Toro	$4.75 billion	2.10	$316.10 million	$3.74	28.14

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 and Institutional Ownership

47.9% of Sono-Tek shares are owned by institutional investors. Comparatively, 87.9% of Toro shares are owned by institutional investors. 5.6% of Sono-Tek shares are owned by insiders. Comparatively, 1.9% of Toro shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Toro 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 Toro

The Toro Company designs, manufactures, markets, and sells professional turf maintenance equipment and services. It operates through two segments: Professional and Residential. The Professional segment offers turf and landscape equipment products, including sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment; rental, specialty, and underground construction equipment, such as horizontal directional drills, walk and ride trenchers, stand-on skid steers, vacuum excavators, stump grinders, turf renovation products, asset locators, pipe rehabilitation solutions, materials handling equipment, and other after-market tools; and snow and ice management equipment, such as snowplows, as well as stand-on snow and ice removal equipment, such as snowplow, snow brush, and snow thrower attachments, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders. This segment also provides irrigation and lighting products that consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and ag-irrigation drip tape and hose products, as well as professionally installed landscape lighting products offered through distributors and landscape contractors. The Residential segment provides walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solution products that include grass and hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, hoses, and hose-end retail irrigation products. It sells its products through a network of distributors, dealers, mass retailers, hardware retailers, equipment rental centers, home centers, and online. The company was founded in 1914 and is headquartered in Bloomington, Minnesota.