Critical Survey: CTS (NYSE:CTS) and Nortech Systems (NASDAQ:NSYS)

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

Profitability

This table compares Nortech Systems and CTS’s 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%
CTS	11.14%	11.92%	8.31%

Analyst Recommendations

This is a summary of recent recommendations for Nortech Systems and CTS, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nortech Systems	1	0	0	0	1.00
CTS	0	1	0	0	2.00

Institutional & Insider Ownership

3.1% of Nortech Systems shares are owned by institutional investors. Comparatively, 96.9% of CTS shares are owned by institutional investors. 10.0% of Nortech Systems shares are owned by company insiders. Comparatively, 1.6% of CTS shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Nortech Systems and CTS”s 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	0.16	-$1.29 million	($0.95)	-7.88
CTS	$515.77 million	2.47	$58.11 million	$1.97	22.28

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

Summary

CTS beats Nortech Systems on 10 of the 11 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 CTS

CTS Corporation manufactures and sells sensors, actuators, and connectivity components in North America, Europe, and Asia. The company provides encoders, rotary position sensors, slide potentiometers, industrial and commercial rotary potentiometers. It also provides non-contacting, and contacting pedals; and eBrake pedals. In addition, the company offers flow meters, hydrophones, non-destructive testing, sonar, ultrasonic imaging, piezoelectric materials, piezoelectric sense products, and bulk products. Further, it provides eMobility, chassis, current sensors, clutch, brake, position sensors, stroke sensor, seating, speed, throttle, transmission, turbo, temperature sensors, and technical related products. Additionally, the company offers DIP, rotary selector, tactile, rotary DIP, and toggle switches, as well as provides transducer related products. Furthermore, it provides EMI, RFI, and RFI products; specialty and resistors; and frequency control products. The company sells and markets its products through its sales engineers, independent manufacturer representatives, and distributors. CTS Corporation was founded in 1896 and is based in Lisle, Illinois.