Critical Contrast: CompoSecure (NASDAQ:CMPO) and Sono-Tek (NASDAQ:SOTK)

CompoSecure (NASDAQ:CMPO) and Sono-Tek (NASDAQ:SOTK) are both small-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Valuation & Earnings

This table compares CompoSecure and Sono-Tek”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CompoSecure	$160.68 million	10.07	-$53.72 million	($2.16)	-5.93
Sono-Tek	$20.91 million	5.13	$1.81 million	$0.13	52.46

Sono-Tek has lower revenue, but higher earnings than CompoSecure. CompoSecure 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 current ratings and price targets for CompoSecure and Sono-Tek, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CompoSecure	0	0	5	0	3.00
Sono-Tek	0	2	0	0	2.00

CompoSecure presently has a consensus price target of $26.00, suggesting a potential upside of 103.12%. Sono-Tek has a consensus price target of $8.50, suggesting a potential upside of 24.63%. Given CompoSecure’s stronger consensus rating and higher probable upside, analysts plainly believe CompoSecure is more favorable than Sono-Tek.

Institutional and Insider Ownership

37.6% of CompoSecure shares are owned by institutional investors. Comparatively, 47.9% of Sono-Tek shares are owned by institutional investors. 52.1% of CompoSecure shares are owned by company insiders. Comparatively, 5.6% of Sono-Tek shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

CompoSecure has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Sono-Tek has a beta of 0.07, meaning that its stock price is 93% less volatile than the S&P 500.

Profitability

This table compares CompoSecure and Sono-Tek’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CompoSecure	-24.53%	-65.50%	26.83%
Sono-Tek	9.62%	10.55%	8.30%

Summary

CompoSecure beats Sono-Tek on 8 of the 14 factors compared between the two stocks.

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.

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.