Analyzing NAPCO Security Technologies (NASDAQ:NSSC) and Cadre (NYSE:CDRE)

NAPCO Security Technologies (NASDAQ:NSSC) and Cadre (NYSE:CDRE) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

85.1% of NAPCO Security Technologies shares are held by institutional investors. Comparatively, 44.0% of Cadre shares are held by institutional investors. 5.2% of NAPCO Security Technologies shares are held by insiders. Comparatively, 31.5% of Cadre shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

NAPCO Security Technologies pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Cadre pays an annual dividend of $0.38 per share and has a dividend yield of 1.2%. NAPCO Security Technologies pays out 47.1% of its earnings in the form of a dividend. Cadre pays out 40.4% 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. NAPCO Security Technologies has raised its dividend for 2 consecutive years and Cadre has raised its dividend for 2 consecutive years.

Profitability

This table compares NAPCO Security Technologies and Cadre’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NAPCO Security Technologies	23.90%	25.42%	21.66%
Cadre	6.65%	12.08%	5.60%

Valuation & Earnings

This table compares NAPCO Security Technologies and Cadre”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NAPCO Security Technologies	$181.62 million	7.71	$43.41 million	$1.19	32.98
Cadre	$567.56 million	2.29	$36.13 million	$0.94	33.96

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

Volatility and Risk

NAPCO Security Technologies has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Cadre has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for NAPCO Security Technologies and Cadre, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NAPCO Security Technologies	0	2	5	1	2.88
Cadre	1	0	1	0	2.00

NAPCO Security Technologies currently has a consensus price target of $37.67, suggesting a potential downside of 4.03%. Cadre has a consensus price target of $31.50, suggesting a potential downside of 1.33%. Given Cadre’s higher possible upside, analysts plainly believe Cadre is more favorable than NAPCO Security Technologies.

Summary

NAPCO Security Technologies beats Cadre on 12 of the 17 factors compared between the two stocks.

About NAPCO Security Technologies

Napco Security Technologies, Inc. develops, manufactures, and sells electronic security systems for commercial, residential, institutional, industrial, and governmental applications in the United States and internationally. Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; intrusion and fire alarm systems, consists of various detectors, a control panel, a digital keypad and signaling equipment; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks. The company’s alarm systems include automatic communicators, cellular communication devices, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panels, and area detectors; and video surveillance systems comprise video cameras, control panels, video monitors, or PCs. It also buys and resells various identification readers, video cameras, PC-based computers, and various peripheral equipment for access control and video surveillance systems; offers school security products; and markets peripheral and related equipment manufactured by other companies. The company markets and sells its products to independent distributors, dealers, and installers of security equipment. Napco Security Technologies, Inc. was founded in 1969 and is headquartered in Amityville, New York.

About Cadre

Cadre Holdings, Inc. manufactures and distributes safety that provides protection to users in hazardous or life-threatening situations in the United States and internationally. The company operates in two segments, Products and Distribution. It offers body armor product, such as concealable, corrections, and tactical armor under the Safariland and Protech Tactical brand names; survival suits, remotely operated vehicles, specialty tools, blast sensors, accessories, and vehicle blast attenuation seats for bomb safety technicians; bomb suits; duty gear, including belts and accessories; and other protective equipment comprising communications gear, forensic and investigation products, firearms cleaning solutions, and crowd control products. The company also offers third-party products, such as uniforms, optics, boots, firearms, and ammunition. It serves first responders, such as state and local law enforcement, fire and rescue, explosive ordnance disposal technicians, emergency medical technicians, fishing, and wildlife enforcement and departments of corrections, as well as federal agencies including the U.S. Department of State, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, U.S. Department of Homeland Security, U.S. Department of Corrections, the Department of Energy, Los Alamos National Laboratories, Waste Isolation Plant, and various foreign government agencies. Cadre Holdings, Inc. was founded in 1964 and is headquartered in Jacksonville, Florida.