Vuzix (NASDAQ:VUZI) vs. Frequency Electronics (NASDAQ:FEIM) Critical Survey

Frequency Electronics (NASDAQ:FEIM) and Vuzix (NASDAQ:VUZI) are both small-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Volatility and Risk

Frequency Electronics has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Vuzix has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Insider & Institutional Ownership

58.6% of Frequency Electronics shares are held by institutional investors. Comparatively, 35.9% of Vuzix shares are held by institutional investors. 17.3% of Frequency Electronics shares are held by insiders. Comparatively, 7.3% of Vuzix 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.

Profitability

This table compares Frequency Electronics and Vuzix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frequency Electronics	3.68%	3.63%	2.49%
Vuzix	-519.11%	-125.60%	-78.58%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Frequency Electronics and Vuzix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frequency Electronics	0	1	2	1	3.00
Vuzix	1	0	0	0	1.00

Frequency Electronics presently has a consensus target price of $59.67, indicating a potential downside of 20.54%. Given Frequency Electronics’ stronger consensus rating and higher possible upside, research analysts plainly believe Frequency Electronics is more favorable than Vuzix.

Earnings & Valuation

This table compares Frequency Electronics and Vuzix”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frequency Electronics	$63.23 million	13.38	-$900,000.00	$0.25	300.36
Vuzix	$6.28 million	34.41	-$32.27 million	($0.39)	-6.56

Frequency Electronics has higher revenue and earnings than Vuzix. Vuzix is trading at a lower price-to-earnings ratio than Frequency Electronics, indicating that it is currently the more affordable of the two stocks.

Summary

Frequency Electronics beats Vuzix on 13 of the 15 factors compared between the two stocks.

About Frequency Electronics

Frequency Electronics, Inc., together with its subsidiaries, engages in designing, development, and manufacturing of precision time and frequency control products and components for microwave integrated circuit applications. It operates through two segments, FEI-NY and FEI-Zyfer. The FEI-NY segment offers precision time and frequency control products for communication satellites, terrestrial cellular telephone or other ground-based telecommunication stations; and other components and systems for the U.S. military; and provides design and technical support for satellite business. FEI-Zyfer segment offers global positioning system technologies to systems and subsystems for secure communications, both government and commercial, and other locator applications; and engages in sale and support of wireline telecommunications products, including US5G. It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia. Frequency Electronics, Inc. was founded in 1961 and is headquartered in Mitchel Field, New York.

About Vuzix

Vuzix Corporation designs, manufactures, and markets smart glasses and augmented reality (AR) technologies and products for the enterprise, medical, defense, and consumer markets. The company’s products include head-mounted smart personal display and wearable computing devices that offer users a portable viewing experience, provide solutions for mobility, wearable displays, and augmented reality, as well as original equipment manufacturer waveguide optical components and display engines. It also provides certified ERP SaaS logistics solution to support hand-held mobile phones and scanners used in logistics, warehousing, and manufacturing applications. It holds approximately 375 patents and patents pending and various IP licenses in the fields of optics, head-mounted displays, and augmented reality Video Eyewear field. It sells its products through resellers, distributors, direct to commercial customers, and online stores, as well as various Vuzix operated web stores in North America, Europe, the Asia-Pacific, and internationally. The company was formerly known as Icuiti Corporation and changed its name to Vuzix Corporation in September 2007. Vuzix Corporation was incorporated in 1997 and is headquartered in West Henrietta, New York.