Research Frontiers (NASDAQ:REFR) versus Nortech Systems (NASDAQ:NSYS) Financial Review

Nortech Systems (NASDAQ:NSYS) and Research Frontiers (NASDAQ:REFR) are both small-cap technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Risk & Volatility

Nortech Systems has a beta of -0.06, suggesting that its stock price is 106% less volatile than the S&P 500. Comparatively, Research Frontiers has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Profitability

This table compares Nortech Systems and Research Frontiers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nortech Systems	0.83%	3.01%	1.36%
Research Frontiers	-344.56%	-168.54%	-85.08%

Institutional & Insider Ownership

3.0% of Nortech Systems shares are owned by institutional investors. Comparatively, 11.9% of Research Frontiers shares are owned by institutional investors. 12.4% of Nortech Systems shares are owned by company insiders. Comparatively, 6.5% of Research Frontiers shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Nortech Systems and Research Frontiers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nortech Systems	0	1	0	0	2.00
Research Frontiers	1	0	0	0	1.00

Earnings and Valuation

This table compares Nortech Systems and Research Frontiers”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nortech Systems	$118.36 million	0.27	-$250,000.00	$0.36	31.14
Research Frontiers	$654,233.00	39.16	-$2.05 million	($0.07)	-10.50

Nortech Systems has higher revenue and earnings than Research Frontiers. Research Frontiers is trading at a lower price-to-earnings ratio than Nortech Systems, indicating that it is currently the more affordable of the two stocks.

Summary

Nortech Systems beats Research Frontiers on 9 of the 12 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 Research Frontiers

Research Frontiers Incorporated engages in the development and marketing of technology and devices to control the flow of light worldwide. It develops and licenses suspended particle device (SPD-Smart) light-control technology to companies that manufacture and market the SPD-Smart chemical emulsion, light-control film made from the chemical emulsion, the light-control panels made by laminating the film, and electronics to power end-products incorporating the film, as well as lamination services for and the end-products, such as windows, skylights, and sunroofs. The company's SPD-Smart light-control technology is used in various product applications, including windows, sunshades, skylights, and interior partitions for homes and buildings; automotive windows, sunroofs, sun-visors, sunshades, rear-view mirrors, instrument panels, and navigation systems; aircraft windows; museum display panels, and eyewear products; and flat panel displays for electronic products. It serves architectural, automotive, marine, and aerospace and appliance applications. The company was incorporated in 1965 and is headquartered in Woodbury, New York.