Comparing NAPCO Security Technologies (NASDAQ:NSSC) & Daktronics (NASDAQ:DAKT)

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

Analyst Ratings

This is a summary of current recommendations and price targets for Daktronics and NAPCO Security Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Daktronics	0	2	2	0	2.50
NAPCO Security Technologies	0	2	6	0	2.75

Daktronics currently has a consensus price target of $31.00, indicating a potential upside of 80.14%. NAPCO Security Technologies has a consensus price target of $50.40, indicating a potential upside of 41.24%. Given Daktronics’ higher probable upside, analysts plainly believe Daktronics is more favorable than NAPCO Security Technologies.

Institutional and Insider Ownership

61.7% of Daktronics shares are owned by institutional investors. Comparatively, 85.1% of NAPCO Security Technologies shares are owned by institutional investors. 4.6% of Daktronics 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Daktronics has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500. Comparatively, NAPCO Security Technologies has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Daktronics	$838.71 million	0.99	$45.38 million	$0.98	17.56
NAPCO Security Technologies	$202.32 million	6.31	$43.03 million	$1.21	29.49

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Daktronics	5.66%	18.05%	9.68%
NAPCO Security Technologies	21.27%	31.41%	26.06%

Summary

NAPCO Security Technologies beats Daktronics on 10 of the 14 factors compared between the two stocks.

About Daktronics

Daktronics, Inc. designs, manufactures, and sells electronic scoreboards, programmable display systems and large screen video displays for sporting, commercial, and transportation applications in the United States and internationally. It operates through Commercial, Live Events, High School Park and Recreation, Transportation, and International segments. The company also offers video display and walls; scoreboards and timing systems; LED message displays and sings; intelligent transportation systems dynamic message signs; mass transit display; sound systems; and digital billboards and street furniture, and digit and price displays. In addition, it provides indoor dynamic messaging systems and liquid crystal display signs; and software and controllers, which includes Venus, a control suite software to control the creation of messages and graphic sequences for uploading to displays. The company sells its products through direct sales and resellers. Daktronics, Inc. was founded in 1968 and is headquartered in Brookings, South Dakota.

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.