Critical Review: PAR Technology (NYSE:PAR) versus CompoSecure (NASDAQ:CMPO)

PAR Technology (NYSE:PAR) and CompoSecure (NASDAQ:CMPO) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Valuation and Earnings

This table compares PAR Technology and CompoSecure”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PAR Technology	$455.55 million	1.28	-$84.46 million	($1.87)	-7.57
CompoSecure	$160.68 million	9.45	-$53.72 million	($2.16)	-5.56

CompoSecure has lower revenue, but higher earnings than PAR Technology. PAR Technology is trading at a lower price-to-earnings ratio than CompoSecure, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

PAR Technology has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, CompoSecure has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

37.6% of CompoSecure shares are held by institutional investors. 2.3% of PAR Technology shares are held by company insiders. Comparatively, 52.1% of CompoSecure shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for PAR Technology and CompoSecure, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PAR Technology	1	1	5	0	2.57
CompoSecure	0	0	6	0	3.00

PAR Technology currently has a consensus target price of $30.67, indicating a potential upside of 116.51%. CompoSecure has a consensus target price of $25.50, indicating a potential upside of 112.32%. Given PAR Technology’s higher probable upside, analysts clearly believe PAR Technology is more favorable than CompoSecure.

Profitability

This table compares PAR Technology and CompoSecure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PAR Technology	-16.04%	-2.57%	-1.56%
CompoSecure	-24.53%	-65.50%	26.83%

Summary

CompoSecure beats PAR Technology on 8 of the 14 factors compared between the two stocks.

About PAR Technology

PAR Technology Corporation, together with its subsidiaries, provides omnichannel cloud-based hardware and software solutions to the restaurant and retail industries worldwide. The Restaurant/Retail segment offers PUNCHH, an enterprise-grade customer loyalty and engagement solution; MENU, an eCommerce platform for restaurant brands; BRINK POS, an open cloud, point-of-sale solution; PAR PAYMENT SERVICES, a merchant services business that enables electronic payment and processing services for businesses; and DATA CENTRAL, a back-office solution that leverages business intelligence and automation technologies. This segment also offers Point-of-Sale Hardware; wireless headsets for drive-thru order-taking; and kitchen display systems, payment devices, cash drawers, printers, and other peripherals. In addition, this segment provides services, such as hardware repair, installation and implementation, training, and on-site and technical support services. The Government segment provides intelligence, surveillance, and reconnaissance solutions; mission systems operations and maintenance, and commercial software products; systems engineering support and software-based solutions; satellite and teleport facility operation and maintenance, engineering, and installation services comprising inside and outside plant services, and maintenance of infrastructure and information systems; satellite ground system support comprising operations and maintenance, sustainment, upgrades, communications security management, anomaly response/resolution, process improvement, emergency response, and disaster recovery services; and information technology infrastructure library services to the United States Department of Defense, intelligence community (IC), and other federal agencies. This segment also offers various IC support services, systems integration, situational awareness solutions, and mission readiness support services. The company was founded in 1968 and is based in New Hartford, New York.

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.