SkyWater Technology (NASDAQ:SKYT – Get Free Report) and Sono-Tek (NASDAQ:SOTK – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.
Profitability
This table compares SkyWater Technology and Sono-Tek’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SkyWater Technology | -5.69% | -19.49% | -3.68% |
| Sono-Tek | 6.93% | 8.10% | 6.07% |
Institutional & Insider Ownership
70.0% of SkyWater Technology shares are held by institutional investors. Comparatively, 47.9% of Sono-Tek shares are held by institutional investors. 37.9% of SkyWater Technology shares are held by insiders. Comparatively, 5.5% of Sono-Tek shares are held by 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.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SkyWater Technology | $342.27 million | 1.55 | -$6.79 million | ($0.34) | -32.47 |
| Sono-Tek | $20.61 million | 3.07 | $1.27 million | $0.09 | 44.67 |
Sono-Tek has lower revenue, but higher earnings than SkyWater Technology. SkyWater Technology is trading at a lower price-to-earnings ratio than Sono-Tek, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for SkyWater Technology and Sono-Tek, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SkyWater Technology | 0 | 0 | 3 | 0 | 3.00 |
| Sono-Tek | 0 | 2 | 0 | 0 | 2.00 |
SkyWater Technology presently has a consensus price target of $13.00, suggesting a potential upside of 17.75%. Sono-Tek has a consensus price target of $7.50, suggesting a potential upside of 86.57%. Given Sono-Tek’s higher possible upside, analysts clearly believe Sono-Tek is more favorable than SkyWater Technology.
Volatility and Risk
SkyWater Technology has a beta of 3.41, meaning that its share price is 241% more volatile than the S&P 500. Comparatively, Sono-Tek has a beta of -0.25, meaning that its share price is 125% less volatile than the S&P 500.
Summary
Sono-Tek beats SkyWater Technology on 8 of the 14 factors compared between the two stocks.
About SkyWater Technology
SkyWater Technology, Inc., together with its subsidiaries, operates as a pure-play technology foundry that engages in the provision of semiconductor development, manufacturing, and packaging services in the United States. The company offers engineering and process development support services to co-create technologies with customers; and semiconductor manufacturing services for various silicon-based analog and mixed-signal, micro-electromechanical systems, and rad-hard integrated circuits. It serves customers operating in the computation, aerospace and defense, automotive, bio-health, consumer, and industrial sectors. The company was incorporated in 2016 and is headquartered in Bloomington, Minnesota.
About Sono-Tek
Sono-Tek Corporation designs and manufactures ultrasonic coating systems for applying on parts and components for the microelectronics/electronics, alternative energy, medical, industrial, and research and development/other markets worldwide. The company also designs and manufactures custom-engineered ultrasonic coating systems; and provides nozzles and generators for manufacturers' equipment. Its products include integrated multi-axis coating systems, integrated coating systems, fluxing systems, OEM systems, and other related systems. In addition, the company provides surface coating solutions and application consulting services. It markets and distributes its products through direct sales personnel, select independent distributors, and sales representatives. The company was incorporated in 1975 and is based in Milton, New York.
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