Sono-Tek (NASDAQ:SOTK – Get Free Report) and Art’s-Way Manufacturing (NASDAQ:ARTW – Get Free Report) are both small-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Earnings & Valuation
This table compares Sono-Tek and Art’s-Way Manufacturing”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sono-Tek | $20.91 million | 4.64 | $1.81 million | $0.12 | 51.33 |
| Art’s-Way Manufacturing | $22.98 million | 0.72 | $1.03 million | ($0.09) | -35.11 |
Sono-Tek has higher earnings, but lower revenue than Art’s-Way Manufacturing. Art’s-Way Manufacturing is trading at a lower price-to-earnings ratio than Sono-Tek, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Sono-Tek and Art’s-Way Manufacturing’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sono-Tek | 9.32% | 9.95% | 7.81% |
| Art’s-Way Manufacturing | -1.65% | -3.06% | -1.72% |
Insider and Institutional Ownership
47.9% of Sono-Tek shares are held by institutional investors. Comparatively, 2.9% of Art’s-Way Manufacturing shares are held by institutional investors. 5.6% of Sono-Tek shares are held by company insiders. Comparatively, 51.5% of Art’s-Way Manufacturing shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current recommendations for Sono-Tek and Art’s-Way Manufacturing, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sono-Tek | 0 | 1 | 1 | 0 | 2.50 |
| Art’s-Way Manufacturing | 1 | 0 | 0 | 0 | 1.00 |
Sono-Tek presently has a consensus price target of $8.50, suggesting a potential upside of 37.99%. Given Sono-Tek’s stronger consensus rating and higher probable upside, research analysts clearly believe Sono-Tek is more favorable than Art’s-Way Manufacturing.
Volatility & Risk
Sono-Tek has a beta of 0.07, suggesting that its share price is 93% less volatile than the S&P 500. Comparatively, Art’s-Way Manufacturing has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.
Summary
Sono-Tek beats Art’s-Way Manufacturing on 10 of the 13 factors compared between the two stocks.
About Sono-Tek
Sono-Tek Corporation designs and manufactures ultrasonic coating systems for applying on parts and components for the microelectronics/electronics, alternative energy, medical, industrial, and research and development/other markets worldwide. The company also designs and manufactures custom-engineered ultrasonic coating systems; and provides nozzles and generators for manufacturers' equipment. Its products include integrated multi-axis coating systems, integrated coating systems, fluxing systems, OEM systems, and other related systems. In addition, the company provides surface coating solutions and application consulting services. It markets and distributes its products through direct sales personnel, select independent distributors, and sales representatives. The company was incorporated in 1975 and is based in Milton, New York.
About Art’s-Way Manufacturing
Art’s-Way Manufacturing Co., Inc. manufactures and distributes farm equipment products. It operates through the Agricultural Products, and Modular Buildings segments. The Agricultural Products segment manufactures a variety of specialized farm machinery under its own label including portable and stationary animal feed processing equipment and related attachments used to mill and mix feed grains into custom animal feed rations, a line of forage equipment consisting of forage boxes, bale processors, running gear, and dump boxes, a line of manure spreaders, sugar beet harvesting equipment, and a line of dirt work equipment. The Modular Buildings segment produces and sells modular buildings, which are custom designed to meet the specific research needs of its customers. It also provides services relating to the design, manufacturing, delivery, installation and renting of the building units that it produces. The company was founded by Arthur Luscombe in 1956 and is headquartered in Armstrong, IA.
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