CPS Technologies (NASDAQ:CPSH) and Nortech Systems (NASDAQ:NSYS) Financial Review

CPS Technologies (NASDAQ:CPSH) and Nortech Systems (NASDAQ:NSYS) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Valuation and Earnings

This table compares CPS Technologies and Nortech Systems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CPS Technologies	$32.60 million	2.62	$420,000.00	$0.03	158.33
Nortech Systems	$118.37 million	0.31	-$250,000.00	($0.10)	-131.00

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for CPS Technologies and Nortech Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CPS Technologies	0	2	1	0	2.33
Nortech Systems	1	0	0	0	1.00

CPS Technologies presently has a consensus target price of $6.00, indicating a potential upside of 26.32%. Given CPS Technologies’ stronger consensus rating and higher probable upside, equities analysts plainly believe CPS Technologies is more favorable than Nortech Systems.

Risk and Volatility

CPS Technologies has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Nortech Systems has a beta of -0.1, meaning that its stock price is 110% less volatile than the S&P 500.

Profitability

This table compares CPS Technologies and Nortech Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CPS Technologies	1.29%	2.43%	1.90%
Nortech Systems	-0.21%	-0.76%	-0.34%

Insider and Institutional Ownership

11.2% of CPS Technologies shares are held by institutional investors. Comparatively, 3.0% of Nortech Systems shares are held by institutional investors. 13.2% of CPS Technologies shares are held by company insiders. Comparatively, 10.0% of Nortech Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

CPS Technologies beats Nortech Systems on 13 of the 14 factors compared between the two stocks.

About CPS Technologies

CPS Technologies Corporation provides advanced material solutions to the transportation, automotive, energy, computing/internet, telecommunication, aerospace, defense, and oil and gas markets in the United States, Europe, and Asia. The company offers metal matrix composites such as baseplates for various applications, including motor controllers used in electric trains, subway cars, wind turbines, and hybrid and electric vehicles; hermetic packages for use in radar, satellite, and avionics applications; baseplates and housings used in modules built with wide band gap semiconductors; and lids and heat spreaders for use in internet switches and routers. It also assembles housings and packages that includes metal matrix composite components for hybrid circuits; and produces armor for naval and military applications. The company sells its products to microelectronics systems companies. The company was formerly known as Ceramics Process Systems Corporation and changed its name to CPS Technologies Corporation in March 2007. CPS Technologies Corporation was incorporated in 1984 and is based in Norton, Massachusetts.

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.