Analyzing Acorn Energy (NASDAQ:ACFN) & CSP (NASDAQ:CSPI)

Acorn Energy (NASDAQ:ACFN) and CSP (NASDAQ:CSPI) are both small-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Insider and Institutional Ownership

26.7% of CSP shares are owned by institutional investors. 35.6% of Acorn Energy shares are owned by insiders. Comparatively, 15.0% of CSP shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Acorn Energy and CSP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acorn Energy	16.12%	10.06%	6.32%
CSP	-1.22%	-1.56%	-0.99%

Risk and Volatility

Acorn Energy has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, CSP has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Acorn Energy and CSP, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acorn Energy	0	1	0	0	2.00
CSP	1	0	0	0	1.00

Dividends

Acorn Energy pays an annual dividend of $0.14 per share and has a dividend yield of 0.8%. CSP pays an annual dividend of $0.12 per share and has a dividend yield of 1.6%. Acorn Energy pays out 23.0% of its earnings in the form of a dividend. CSP pays out -171.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CSP has increased its dividend for 2 consecutive years. CSP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Acorn Energy and CSP”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acorn Energy	$9.57 million	4.81	$2.51 million	$0.61	30.05
CSP	$56.91 million	1.36	-$90,000.00	($0.07)	-110.00

Acorn Energy has higher earnings, but lower revenue than CSP. CSP is trading at a lower price-to-earnings ratio than Acorn Energy, indicating that it is currently the more affordable of the two stocks.

Summary

Acorn Energy beats CSP on 9 of the 15 factors compared between the two stocks.

About Acorn Energy

Acorn Energy, Inc., through its subsidiaries, develops and markets wireless remote monitoring and control systems for various markets in the United States and internationally. It operates through two segments, Power Generation (PG) Monitoring and Cathodic Protection (CP) Monitoring. The PG segment provides wireless remote monitoring and control systems, and services for critical assets, which include stand-by power generators, compressors, pumps, pumpjacks, light towers, turbines, and other industrial equipment; and Internet of Things applications. The CP segment offers remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies. The company was incorporated in 1986 and is based in Wilmington, Delaware.

About CSP

CSP Inc. develops and markets IT integration solutions, security products, managed IT services, cloud services, purpose-built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value-added reseller to various customers in web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as planning, designing, assessment, implementation, migration, optimization, and project management; storage and virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; and IT security compliance services. In addition, this segment provides unified communications, wireless, and routing and switching solutions; custom software applications and solutions development and support services; optimization, maintenance, and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT, as well as IT security support tasks. Further, this segment offers managed and cloud services, such as proactive monitoring and remote management of IT infrastructure, managed and hosted unified communication services, security, and backup and replication. The High Performance Products segment offers ARIA Software-Defined Security, a cybersecurity solution; ARIA Zero Trust PROTECT that stopping the attacks that are used to attack critical infrastructure applications; Myricom network adapters; and multicomputer products for digital signal processing applications in the defense markets. CSP Inc. was incorporated in 1968 and is headquartered in Lowell, Massachusetts.