Reviewing NAPCO Security Technologies (NASDAQ:NSSC) and Flex (NASDAQ:FLEX)

Flex (NASDAQ:FLEX) and NAPCO Security Technologies (NASDAQ:NSSC) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Earnings & Valuation

This table compares Flex and NAPCO Security Technologies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flex	$27.91 billion	1.50	$880.00 million	$2.59	43.64
NAPCO Security Technologies	$202.32 million	6.20	$43.03 million	$1.21	28.98

Flex has higher revenue and earnings than NAPCO Security Technologies. NAPCO Security Technologies is trading at a lower price-to-earnings ratio than Flex, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Flex and NAPCO Security Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flex	0	3	8	1	2.83
NAPCO Security Technologies	0	2	6	0	2.75

Flex presently has a consensus price target of $114.20, indicating a potential upside of 1.03%. NAPCO Security Technologies has a consensus price target of $50.40, indicating a potential upside of 43.75%. Given NAPCO Security Technologies’ higher possible upside, analysts clearly believe NAPCO Security Technologies is more favorable than Flex.

Profitability

This table compares Flex and NAPCO Security Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flex	3.32%	23.15%	5.50%
NAPCO Security Technologies	21.27%	31.41%	26.06%

Volatility and Risk

Flex has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, NAPCO Security Technologies has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500.

Institutional & Insider Ownership

94.3% of Flex shares are owned by institutional investors. Comparatively, 85.1% of NAPCO Security Technologies shares are owned by institutional investors. 0.6% of Flex shares are owned by company insiders. Comparatively, 5.7% of NAPCO Security Technologies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Flex beats NAPCO Security Technologies on 9 of the 15 factors compared between the two stocks.

About Flex

Flex Ltd. provides technology, supply chain, and manufacturing solutions in Asia, the Americas, and Europe. It operates through three segments: Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker. The FAS segment offers flexible supply and manufacturing system comprising communications, enterprise and cloud solution, which includes data, edge, and communications infrastructure; lifestyle solution including appliances, consumer packaging, floorcare, micro mobility, and audio; and consumer devices, such as mobile and high velocity consumer devices. Its FRS segment provides complex ramps with specialized production models and critical environments, which comprise automotive including next generation mobility, autonomous, connectivity, electrification, and smart technologies; health solutions, such as medical devices, medical equipment, and drug delivery; and industrial solutions including capital equipment, industrial devices, and renewables and grid edge. The Nextracker segment offers solar tracker and software solutions, which are used in utility-scale and ground-mounted distributed generation solar projects. In addition, it provides a broad array of services including design and engineering, component services, rapid prototyping, fulfillment, and circular economy solutions. The company was formerly known as Flextronics International Ltd. and changed its name to Flex Ltd. in September 2016. Flex Ltd. was founded in 1969 and is headquartered in Singapore.

About NAPCO Security Technologies

Napco Security Technologies, Inc. develops, manufactures, and sells electronic security systems for commercial, residential, institutional, industrial, and governmental applications in the United States and internationally. Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; intrusion and fire alarm systems, consists of various detectors, a control panel, a digital keypad and signaling equipment; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks. The company’s alarm systems include automatic communicators, cellular communication devices, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panels, and area detectors; and video surveillance systems comprise video cameras, control panels, video monitors, or PCs. It also buys and resells various identification readers, video cameras, PC-based computers, and various peripheral equipment for access control and video surveillance systems; offers school security products; and markets peripheral and related equipment manufactured by other companies. The company markets and sells its products to independent distributors, dealers, and installers of security equipment. Napco Security Technologies, Inc. was founded in 1969 and is headquartered in Amityville, New York.