Contrasting Highway (NASDAQ:HIHO) and Elmet Group (NASDAQ:ELMT)

Highway (NASDAQ:HIHO) and Elmet Group (NASDAQ:ELMT) are both small-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Highway and Elmet Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highway	1	0	0	0	1.00
Elmet Group	1	1	4	0	2.50

Elmet Group has a consensus target price of $27.50, suggesting a potential upside of 24.58%. Given Elmet Group’s stronger consensus rating and higher probable upside, analysts plainly believe Elmet Group is more favorable than Highway.

Insider and Institutional Ownership

13.2% of Highway shares are held by institutional investors. 32.1% of Highway shares are held by insiders. Comparatively, 44.2% of Elmet Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Highway and Elmet Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highway	-28.08%	-25.93%	-15.72%
Elmet Group	N/A	N/A	N/A

Earnings and Valuation

This table compares Highway and Elmet Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highway	$4.80 million	0.82	-$1.52 million	($0.32)	-2.66
Elmet Group	$228.53 million	2.94	$12.49 million	$0.41	53.84

Elmet Group has higher revenue and earnings than Highway. Highway is trading at a lower price-to-earnings ratio than Elmet Group, indicating that it is currently the more affordable of the two stocks.

Summary

Elmet Group beats Highway on 12 of the 13 factors compared between the two stocks.

About Highway

Highway Holdings Limited, together with its subsidiaries, manufactures and supplies metal, plastic, electric, and electronic components, subassemblies, and finished products for original equipment manufacturers (OEMs) and contract manufacturers. It operates through two segments, Metal Stamping and Mechanical OEM; and Electric OEM. The company also trades in plastic injection products; and manufactures and assembles automation equipment. Its products are used in the manufacture of products, such as photocopiers, laser printers, print cartridges, electrical connectors, electrical circuits, vacuum cleaners, LED power supplies, stepping motors, pumps for dishwashers, and other washing machine components. In addition, the company assists customers in the design and development of the tooling used in the metal and plastic manufacturing process, as well as provides an array of other manufacturing and engineering services, including metal stamping, screen printing, plastic injection molding, pad printing, and electronic assembly of printed circuit boards. It operates in Hong Kong and China, Europe, North America, and other Asian countries. Highway Holdings Limited was incorporated in 1990 and is headquartered in Sheung Shui, Hong Kong.

About Elmet Group

Elmet provides precision-engineered components and advanced high-energy systems for growth markets. Our customers in these markets require advanced technology involving critical and strategic materials, such as tungsten, molybdenum and niobium (such materials, the “Critical Materials”) and high-level radio frequency (“RF”) engineering, including plasma generation, radar, and other high-energy systems (together, “High-Power Microwave”). Our products and solutions are integral to the Aerospace, Defense and Government, Industrial, Medical, Semiconductor and Electronics, and Energy industries. These are industries which require components capable of performing in extreme thermal, electromagnetic, and technical environments for vital use cases. Our fundamental mission is to strengthen U.S. domestic manufacturing capabilities to support the United States and its allies’ needs in both Critical Materials and advanced High-Power Microwave systems. We believe we are the leader and sole-source U.S. producer of many highly engineered Critical Materials products and a leading designer and manufacturer of High-Power Microwave components in the United States. Our business is organized into two divisions, Critical Materials Components (“CMC”) and Engineered Microwave Products (“EMP”). Through our divisions, we own and operate a vertically integrated engineering-to-production system, with custom design, development, and processing expertise for Critical Materials and High-Power Microwave that is unmatched in our markets and the industries in which we operate. Our High-Power Microwave expertise capitalizes on our vertically integrated engineering-to-production system, enabling us to deliver microwave energy solutions with custom design and development expertise. Our Critical Materials engineering and production expertise enables us to custom design elegant solutions for some of the most challenging environments on the planet. We believe these capabilities provide a significant competitive advantage in our markets and the industries in which we compete. — We are proud to be the only U.S.-owned and U.S.-based manufacturer of highly engineered tungsten and molybdenum products through our CMC division. We control the powder production, pressing, sintering, forming, milling and engineering of tungsten and molybdenum oxide to the finished engineered product. Our CMC products support many of the most critical programs on land, sea and air of the United States Department of War (also referred to as the United States Department of Defense) (the “DoW”). Our engineering expertise in our EMP division has enabled us to provide products and services to a wide variety of existing and emerging programs also supporting the DoW and space sector leaders, such as Lockheed Martin Corporation (“Lockheed Martin”), RTX Corporation (“Raytheon”), Teledyne Technologies Incorporated (“Teledyne”) and the National Aeronautics and Space Administration (“NASA”). Our products are widely used in over 95 national lab programs, including benchmark research and development facilities such as Fermi National Accelerator Laboratory (“Fermi”) and Los Alamos National Laboratory (“Los Alamos”) and many others around the world. Because of the common relationship among some of the products we offer, we regularly incorporate our Critical Materials and our High-Power Microwave components in the same defense programs and high-powered energy research facilities throughout the United States, United Kingdom and Europe. Our comprehensive in-house design and manufacturing capabilities are supported by close to 100 engineers, engineering technicians, RF experts, metallurgists and research and development scientists. Our customers benefit from the specialized expertise, know-how and product design we have developed in both engineered high-temperature, high-density Critical Materials and High-Power Microwave technology. Our specific capabilities provide our customers with a value proposition which allows these customers to simplify their supply chain, increase their speed to market and maintain competitive cost structures. Our engineering expertise and established track record position us to serve customers who need a systems solution required to withstand extreme environments and meet stringent performance requirements. These customers rely on us to deliver technical design and scaled manufacturing of Critical Materials components and High-Power Microwave integrated systems to meet these standards. Given the critical nature of the components and solutions we provide, we engage with customers early in their design cycle to develop difficult-to-replicate solutions, using our specialized processes and equipment, creating a competitive advantage. We leverage our vertical integration and engineering capabilities to provide our products and services to five high-growth, strategically critical U.S. and global end-markets, which require components capable of performing in extreme thermal, electromagnetic, and mechanical environments including: Aerospace, Defense and Government, Industrial, Medical, Semiconductor and Electronics and Energy. We were organized as a corporation under the laws of the State of Delaware on September 13, 2024. Our principal executive offices are located in Portland, ME.