Critical Contrast: TransAct Technologies (TACT) and Diebold, (NYSE:DBD)

TransAct Technologies (NASDAQ: TACT) and Diebold, (NYSE:DBD) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitabiliy, analyst recommendations, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for TransAct Technologies and Diebold,, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TransAct Technologies 0 0 1 0 3.00
Diebold, 0 3 4 0 2.57

TransAct Technologies currently has a consensus target price of $11.00, suggesting a potential upside of 15.79%. Diebold, has a consensus target price of $31.75, suggesting a potential upside of 46.65%. Given Diebold,’s higher possible upside, analysts clearly believe Diebold, is more favorable than TransAct Technologies.

Institutional & Insider Ownership

38.0% of TransAct Technologies shares are held by institutional investors. 11.6% of TransAct Technologies shares are held by insiders. Comparatively, 1.4% of Diebold, shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

TransAct Technologies pays an annual dividend of $0.36 per share and has a dividend yield of 3.8%. Diebold, pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. TransAct Technologies pays out 65.5% of its earnings in the form of a dividend. Diebold, pays out -10.9% 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.

Volatility and Risk

TransAct Technologies has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Diebold, has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.

Profitability

This table compares TransAct Technologies and Diebold,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TransAct Technologies 7.27% 16.84% 12.79%
Diebold, -6.04% 7.25% 1.12%

Earnings and Valuation

This table compares TransAct Technologies and Diebold,’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TransAct Technologies $56.88 million 1.23 $6.97 million $0.55 17.27
Diebold, $4.46 billion 0.37 $243.00 million ($3.67) -5.90

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

Summary

TransAct Technologies beats Diebold, on 9 of the 15 factors compared between the two stocks.

About TransAct Technologies

TransAct Technologies Incorporated (TransAct) designs, develops and sells market-specific solutions, including printers, terminals, software and other products for transaction-based and other industries. The Company operates through the segment, which includes design, development, assembly and marketing of transaction printers and terminals, and providing printer and terminal related software, services, supplies and spare parts. Its thermal, inkjet and impact printers and terminals generate labels and transaction records, such as receipts, tickets, coupons, register journals and other documents, as well as printed logging, and plotting of oil field and well drilling data. Its products are sold under the AccuDate, Ithaca, RESPONDER, Epic, EPICENTRAL and Printrex brand names. It focuses on various markets, such as food safety, banking and point-of-sale (POS), casino and gaming, lottery and Printrex, Inc. (Printrex), which serves the oil and gas, medical and mobile printing markets.

About Diebold,

Diebold Nixdorf, Incorporated provides connected commerce services, software and technology. The Company’s geographic segments include North America (NA), Asia Pacific (AP), Europe, Middle East and Africa (EMEA), and Latin America (LA). These segments sell and service financial self-service (FSS), retail solutions and security systems. The Company is engaged in providing connected commerce solutions to financial institutions. These solutions are supported by a field service organization. The Company provides security solutions, which combine a services portfolio and products to help address its customers’ needs. The Company provides services for a portfolio of physical security offerings, in addition to serving as a national locksmith. The Company provides voting machines for official elections and the terminals for the governmental lottery and correspondent bank.

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