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

Institutional & Insider Ownership

88.7% of Harmonic shares are held by institutional investors. 16.3% of Northstar Electronics shares are held by company insiders. Comparatively, 6.4% of Harmonic shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Northstar Electronics and Harmonic, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northstar Electronics 0 0 0 0 N/A
Harmonic 0 0 5 0 3.00

Harmonic has a consensus price target of $7.80, suggesting a potential upside of 1.56%. Given Harmonic’s higher probable upside, analysts clearly believe Harmonic is more favorable than Northstar Electronics.

Profitability

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

Net Margins Return on Equity Return on Assets
Northstar Electronics N/A N/A -335.85%
Harmonic -4.74% -0.08% -0.04%

Earnings & Valuation

This table compares Northstar Electronics and Harmonic’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northstar Electronics N/A N/A -$260,000.00 N/A N/A
Harmonic $403.56 million 1.69 -$21.03 million $0.03 256.00

Northstar Electronics has higher earnings, but lower revenue than Harmonic.

Volatility and Risk

Northstar Electronics has a beta of -0.77, meaning that its share price is 177% less volatile than the S&P 500. Comparatively, Harmonic has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Summary

Harmonic beats Northstar Electronics on 6 of the 10 factors compared between the two stocks.

About Northstar Electronics

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.

About Harmonic

Harmonic Inc. designs, manufactures, and sells video infrastructure products and system solutions worldwide. Its products enable customers to create, prepare, and deliver a range of video and broadband services to consumer devices, including televisions, personal computers, laptops, tablets, and smart phones. The company operates in two segments, Video and Cable Access. The Video segment sells video processing, and production and playout solutions and services to cable operators, and satellite and telecommunications Pay-TV service providers, as well as to broadcast and media, including streaming media companies. This segment's video processing solutions include network management and application software, and hardware products, such as cloud media processing, broadcast and over-the-top encoders, contribution encoders, high-density transcoders and stream processing, multiscreen delivery, decoders and descramblers, and video servers. This segment also provides video-optimized storage systems; and unified video playout and processing software-as-a-service solutions. The Cable Access segment offers cable edge solutions and related services, including CableOS software-based cable access solutions; and narrowcast services gateway products primarily to cable operators. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, program management, technical design and planning, building and site preparation, integration and equipment installation, system testing, and training. Harmonic Inc. sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was founded in 1988 and is headquartered in San Jose, California.

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