CTS (NYSE:CTS – Get Free Report) and Nortech Systems (NASDAQ:NSYS – Get Free Report) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.
Risk & Volatility
CTS has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Nortech Systems has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings for CTS and Nortech Systems, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CTS | 0 | 1 | 0 | 0 | 2.00 |
| Nortech Systems | 1 | 0 | 0 | 0 | 1.00 |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CTS | $515.77 million | 2.50 | $58.11 million | $1.97 | 22.58 |
| Nortech Systems | $128.13 million | 0.16 | -$1.29 million | ($0.95) | -7.78 |
CTS has higher revenue and earnings than Nortech Systems. Nortech Systems is trading at a lower price-to-earnings ratio than CTS, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares CTS and Nortech Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CTS | 11.14% | 11.92% | 8.31% |
| Nortech Systems | -2.25% | -7.93% | -3.56% |
Institutional & Insider Ownership
96.9% of CTS shares are held by institutional investors. Comparatively, 3.1% of Nortech Systems shares are held by institutional investors. 1.6% of CTS shares are held by company insiders. Comparatively, 10.0% of Nortech Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
CTS beats Nortech Systems on 11 of the 12 factors compared between the two stocks.
About CTS
CTS Corporation manufactures and sells sensors, actuators, and connectivity components in North America, Europe, and Asia. The company provides encoders, rotary position sensors, slide potentiometers, industrial and commercial rotary potentiometers. It also provides non-contacting, and contacting pedals; and eBrake pedals. In addition, the company offers flow meters, hydrophones, non-destructive testing, sonar, ultrasonic imaging, piezoelectric materials, piezoelectric sense products, and bulk products. Further, it provides eMobility, chassis, current sensors, clutch, brake, position sensors, stroke sensor, seating, speed, throttle, transmission, turbo, temperature sensors, and technical related products. Additionally, the company offers DIP, rotary selector, tactile, rotary DIP, and toggle switches, as well as provides transducer related products. Furthermore, it provides EMI, RFI, and RFI products; specialty and resistors; and frequency control products. The company sells and markets its products through its sales engineers, independent manufacturer representatives, and distributors. CTS Corporation was founded in 1896 and is based in Lisle, Illinois.
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.
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