Northstar Electronics (OTCMKTS:NEIK) and PC Tel (NASDAQ:PCTI) are both small-cap aerospace companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Profitability

This table compares Northstar Electronics and PC Tel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northstar Electronics N/A N/A -9,736.28%
PC Tel -15.53% -2.93% -2.54%

Valuation and Earnings

This table compares Northstar Electronics and PC Tel’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northstar Electronics N/A N/A -$630,000.00 N/A N/A
PC Tel $82.98 million 1.14 -$12.89 million ($0.23) -22.39

Northstar Electronics has higher earnings, but lower revenue than PC Tel.

Risk & Volatility

Northstar Electronics has a beta of -1.73, indicating that its stock price is 273% less volatile than the S&P 500. Comparatively, PC Tel has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Northstar Electronics and PC Tel, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northstar Electronics 0 0 0 0 N/A
PC Tel 0 1 1 0 2.50

PC Tel has a consensus price target of $5.25, suggesting a potential upside of 1.94%. Given PC Tel’s higher probable upside, analysts clearly believe PC Tel is more favorable than Northstar Electronics.

Dividends

PC Tel pays an annual dividend of $0.22 per share and has a dividend yield of 4.3%. Northstar Electronics does not pay a dividend. PC Tel pays out -95.7% of its earnings in the form of a dividend. PC Tel has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

63.3% of PC Tel shares are held by institutional investors. 16.3% of Northstar Electronics shares are held by insiders. Comparatively, 6.8% of PC Tel shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

PC Tel beats Northstar Electronics on 9 of the 13 factors compared between the two stocks.

Northstar Electronics Company Profile

Northstar Electronics, Inc. does not have significant operations. Previously, the company was engaged in the contract manufacturing of defense, aerospace, and homeland security products, as well as the underwater sonar sensors business. It intends to manufacture and market single engine airplane with industrial applications, as well as provide maintenance, repair, and overhaul services. The company was founded in 1998 and is based in Virginia Beach, Virginia.

PC Tel Company Profile

PCTEL, Inc., together with its subsidiaries, delivers performance critical telecom solutions in the Asia Pacific, Europe, the Middle East, Africa, and the Americas. The company operates in two segments, Connected Solutions and RF Solutions. The Connected Solutions segment designs and delivers precision antennas, which are used primarily in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in equipment and devices for the Industrial Internet of Things. The RF Solutions segment provides test tools that enhance the performance of wireless networks. The company serves public and private carriers, wireless infrastructure providers, wireless equipment distributors, and value added resellers, as well as original equipment manufacturer providers. PCTEL, Inc. was founded in 1994 and is headquartered in Bloomingdale, Illinois.

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