Head-To-Head Analysis: Optex Systems (NASDAQ:OPXS) versus Environmental Tectonics (OTCMKTS:ETCC)

Optex Systems (NASDAQ:OPXS) and Environmental Tectonics (OTCMKTS:ETCC) are both small-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Optex Systems and Environmental Tectonics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Optex Systems	0	1	0	1	3.00
Environmental Tectonics	0	0	0	0	0.00

Valuation and Earnings

This table compares Optex Systems and Environmental Tectonics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Optex Systems	$41.34 million	1.90	$5.15 million	$0.59	19.14
Environmental Tectonics	$62.72 million	0.26	$3.05 million	$0.09	18.89

Optex Systems has higher earnings, but lower revenue than Environmental Tectonics. Environmental Tectonics is trading at a lower price-to-earnings ratio than Optex Systems, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

19.1% of Optex Systems shares are held by institutional investors. 27.7% of Optex Systems shares are held by company insiders. Comparatively, 74.8% of Environmental Tectonics shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Optex Systems and Environmental Tectonics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Optex Systems	10.00%	19.33%	15.82%
Environmental Tectonics	3.23%	51.01%	3.11%

Risk and Volatility

Optex Systems has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, Environmental Tectonics has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Summary

Optex Systems beats Environmental Tectonics on 9 of the 13 factors compared between the two stocks.

About Optex Systems

Optex Systems Holdings, Inc manufactures and sells optical sighting systems and assemblies primarily for the U.S. department of defense, foreign military applications, and commercial markets in the United States. It offers periscopes, such as laser and non-laser protected plastic and glass periscopes, electronic M17 day/thermal periscopes, and vision blocks; sighting systems, including back up sights, digital day and night sighting systems, M36 thermal periscope, unity mirrors, optical weapon system support and maintenance, commander weapon station sights, and sight assembly refurbishments; howitzers comprising M137 telescope, M187 mount, M119 aiming device, XM10 and aiming circles; and applied optics center consisting of laser interference filter, optical assemblies, laser filter units, day windows, and specialty thin film coatings, as well as other products, such as muzzle reference systems, binoculars, collimators, optical lenses and elements, and windows. The company also provides various periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Its products are installed on various types of U.S. military land vehicles, such as the Abrams, Bradley, and Stryker families of fighting vehicles, as well as light armored and armored security vehicles. The company offers its products directly to the federal government, prime contractors, and foreign governments. Optex Systems Holdings, Inc was founded in 1987 and is headquartered in Richardson, Texas. Optex Systems Holdings, Inc is a subsidiary of Sileas Corporation.

About Environmental Tectonics

Environmental Tectonics Corporation, together with its subsidiaries, operates as an engineered solutions company in the United States and internationally. It operates in two segments, Aerospace Solutions (Aerospace) and Commercial/Industrial Systems (CIS). The Aerospace segment engages in the design, manufacture, and sale of aircrew training systems to commercial, governmental, and military defense agencies; training devices, including altitude and multiplace chambers to governmental and military defense agencies, and civil aviation organizations; and advanced disaster management simulators to governmental organizations, original equipment manufacturers, fire and emergency training schools, universities, and airports, as well as provides integrated logistics support services. The CIS segment is involved in the design, manufacture, and sale of steam and gas sterilizers to medical device and pharmaceutical manufacturers, as well as universities; and environmental testing and simulation systems primarily to commercial automotive, as well as to heating, ventilation, and air conditioning manufacturers. This segment also provides parts, as well as upgrade, maintenance, and repair services. The company markets its products through independent sales representatives and distributors. Environmental Tectonics Corporation was incorporated in 1969 and is headquartered in Southampton, Pennsylvania.