Critical Analysis: Lakeland Industries (NASDAQ:LAKE) versus NAPCO Security Technologies (NASDAQ:NSSC)

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

Institutional & Insider Ownership

71.7% of Lakeland Industries shares are owned by institutional investors. Comparatively, 85.1% of NAPCO Security Technologies shares are owned by institutional investors. 1.9% of Lakeland Industries shares are owned by company insiders. Comparatively, 5.2% of NAPCO Security Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Lakeland Industries and NAPCO Security Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lakeland Industries	$167.21 million	0.80	-$18.08 million	($3.01)	-4.66
NAPCO Security Technologies	$188.82 million	5.74	$49.82 million	$1.22	24.89

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lakeland Industries	-13.31%	-6.88%	-4.47%
NAPCO Security Technologies	25.00%	26.14%	22.34%

Risk and Volatility

Lakeland Industries has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, NAPCO Security Technologies has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Dividends

Lakeland Industries pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. NAPCO Security Technologies pays an annual dividend of $0.56 per share and has a dividend yield of 1.8%. Lakeland Industries pays out -4.0% of its earnings in the form of a dividend. NAPCO Security Technologies pays out 45.9% 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. Lakeland Industries has increased its dividend for 1 consecutive years and NAPCO Security Technologies has increased its dividend for 2 consecutive years. NAPCO Security Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Lakeland Industries and NAPCO Security Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lakeland Industries	0	0	3	0	3.00
NAPCO Security Technologies	0	4	3	0	2.43

Lakeland Industries presently has a consensus target price of $26.00, indicating a potential upside of 85.19%. NAPCO Security Technologies has a consensus target price of $30.83, indicating a potential upside of 1.53%. Given Lakeland Industries’ stronger consensus rating and higher possible upside, research analysts plainly believe Lakeland Industries is more favorable than NAPCO Security Technologies.

Summary

NAPCO Security Technologies beats Lakeland Industries on 13 of the 16 factors compared between the two stocks.

About Lakeland Industries

Lakeland Industries, Inc. manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide. It offers firefighting and heat protective apparel to protect against fire; high-end chemical protective suits to provide protection from highly concentrated, toxic and/or lethal chemicals, and biological toxins; and limited use/disposable protective clothing, such as coveralls, laboratory coats, shirts, pants, hoods, aprons, sleeves, arm guards, caps, and smocks. The company provides durable woven garments, including electrostatic dissipative apparel used in electronics clean rooms; flame resistant meta aramid, para aramid, and FR cotton coveralls/pants/jackets used in petrochemical, refining operations, and electrical utilities; FR fabrics; and cotton and polycotton coveralls, lab coats, pants, and shirts. In addition, it provides high visibility clothing comprising reflective apparel, including vests, T-shirts, sweatshirts, jackets, coats, raingear, jumpsuits, hats, and gloves; and gloves and sleeves that are used in the automotive, glass, and metal fabrication industries. The company sells its products to a network of safety and industrial supply distributors through in-house sales teams, customer service group, and independent sales representatives. It serves end users, such as integrated oil, chemical/petrochemical, automobile, steel, glass, construction, smelting, cleanroom, janitorial, pharmaceutical, and high technology electronics manufacturers, as well as scientific, medical laboratories, and the utilities industry; and federal, state, and local governmental agencies and departments. Lakeland Industries, Inc. was incorporated in 1982 and is headquartered in Huntsville, Alabama.

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.