Reviewing Electro-Sensors (NASDAQ:ELSE) & Frequency Electronics (NASDAQ:FEIM)

Frequency Electronics (NASDAQ:FEIM) and Electro-Sensors (NASDAQ:ELSE) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Frequency Electronics and Electro-Sensors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frequency Electronics	0	1	1	0	2.50
Electro-Sensors	0	1	0	0	2.00

Frequency Electronics currently has a consensus target price of $43.67, suggesting a potential downside of 16.07%. Given Frequency Electronics’ stronger consensus rating and higher possible upside, equities analysts plainly believe Frequency Electronics is more favorable than Electro-Sensors.

Insider and Institutional Ownership

58.6% of Frequency Electronics shares are owned by institutional investors. Comparatively, 11.7% of Electro-Sensors shares are owned by institutional investors. 28.0% of Frequency Electronics shares are owned by company insiders. Comparatively, 13.3% of Electro-Sensors shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Frequency Electronics and Electro-Sensors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frequency Electronics	10.78%	12.69%	7.84%
Electro-Sensors	3.02%	2.10%	1.98%

Earnings & Valuation

This table compares Frequency Electronics and Electro-Sensors”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frequency Electronics	$69.81 million	7.33	$23.69 million	$0.75	69.37
Electro-Sensors	$10.14 million	2.65	$310,000.00	$0.09	84.67

Frequency Electronics has higher revenue and earnings than Electro-Sensors. Frequency Electronics is trading at a lower price-to-earnings ratio than Electro-Sensors, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Frequency Electronics has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Electro-Sensors has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.

Summary

Frequency Electronics beats Electro-Sensors on 13 of the 14 factors compared between the two stocks.

About Frequency Electronics

Frequency Electronics, Inc., together with its subsidiaries, engages in designing, development, and manufacturing of precision time and frequency control products and components for microwave integrated circuit applications. It operates through two segments, FEI-NY and FEI-Zyfer. The FEI-NY segment offers precision time and frequency control products for communication satellites, terrestrial cellular telephone or other ground-based telecommunication stations; and other components and systems for the U.S. military; and provides design and technical support for satellite business. FEI-Zyfer segment offers global positioning system technologies to systems and subsystems for secure communications, both government and commercial, and other locator applications; and engages in sale and support of wireline telecommunications products, including US5G. It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia. Frequency Electronics, Inc. was founded in 1961 and is headquartered in Mitchel Field, New York.

About Electro-Sensors

Electro-Sensors, Inc. engages in the manufacture and selling of industrial production monitoring and process control systems. Its products include shaft speed witches; wireless hazard monitoring; temperature sensor; slide gate and angle position; bearing sensors and belt alignment; and motor drive control. The company was founded by James P. Slattery in 1965 and is headquartered in Minnetonka, MN.