Nortech Systems (NASDAQ:NSYS – Get Free Report) and Deswell Industries (NASDAQ:DSWL – Get Free Report) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.
Profitability
This table compares Nortech Systems and Deswell Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nortech Systems | -2.25% | -7.93% | -3.56% |
| Deswell Industries | N/A | N/A | N/A |
Valuation & Earnings
This table compares Nortech Systems and Deswell Industries”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nortech Systems | $128.13 million | 0.20 | -$1.29 million | ($0.95) | -9.52 |
| Deswell Industries | $67.61 million | 0.87 | $11.14 million | $0.48 | 7.71 |
Deswell Industries has lower revenue, but higher earnings than Nortech Systems. Nortech Systems is trading at a lower price-to-earnings ratio than Deswell Industries, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
3.1% of Nortech Systems shares are owned by institutional investors. 10.0% of Nortech Systems shares are owned by company insiders. Comparatively, 39.0% of Deswell Industries shares are owned by company 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.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Nortech Systems and Deswell Industries, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nortech Systems | 1 | 0 | 0 | 0 | 1.00 |
| Deswell Industries | 0 | 0 | 1 | 0 | 3.00 |
Summary
Deswell Industries beats Nortech Systems on 10 of the 12 factors compared between the two stocks.
About Nortech Systems
Nortech Systems Incorporated provides design and manufacturing solutions for electromedical devices, electromechanical systems, assemblies, and components in the United States, Mexico, and China. It offers a range of technical and manufacturing, and support services, including project management, designing, testing, prototyping, manufacturing, supply chain management, and post-market services. The company also provides manufacturing and engineering services for medical devices, printed circuit board assemblies, wire and cable assemblies, and higher-level electromechanical assemblies. In addition, it offers engineering and repair services. The company serves original equipment manufacturers in the medical, aerospace and defense, and industrial markets through business development teams and independent manufacturers' representatives. Nortech Systems Incorporated was founded in 1990 and is headquartered in Maple Grove, Minnesota.
About Deswell Industries
Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers in China, the United States, Europe, Hong Kong, the United Kingdom, Canada, and internationally. It operates through two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue audio mixers, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, wired and wireless audio streaming products, and headphones; printed circuit board assemblies; and medical products. The company was founded in 1987 and is based in Macau.
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