NAPCO Security Technologies (NASDAQ:NSSC) vs. Alarm.com (NASDAQ:ALRM) Head to Head Review

NAPCO Security Technologies (NASDAQ:NSSC) and Alarm.com (NASDAQ:ALRM) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Insider and Institutional Ownership

85.1% of NAPCO Security Technologies shares are owned by institutional investors. Comparatively, 91.7% of Alarm.com shares are owned by institutional investors. 5.2% of NAPCO Security Technologies shares are owned by insiders. Comparatively, 5.8% of Alarm.com shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NAPCO Security Technologies	$188.82 million	5.71	$49.82 million	$1.22	24.78
Alarm.com	$939.83 million	2.86	$124.12 million	$2.37	22.81

Alarm.com has higher revenue and earnings than NAPCO Security Technologies. Alarm.com 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.

Risk & Volatility

NAPCO Security Technologies has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Alarm.com has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for NAPCO Security Technologies and Alarm.com, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NAPCO Security Technologies	0	4	3	0	2.43
Alarm.com	1	2	2	1	2.50

NAPCO Security Technologies currently has a consensus price target of $30.83, suggesting a potential upside of 2.00%. Alarm.com has a consensus price target of $64.33, suggesting a potential upside of 19.03%. Given Alarm.com’s stronger consensus rating and higher possible upside, analysts plainly believe Alarm.com is more favorable than NAPCO Security Technologies.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NAPCO Security Technologies	25.00%	26.14%	22.34%
Alarm.com	13.45%	14.04%	4.99%

Summary

Alarm.com beats NAPCO Security Technologies on 8 of the 15 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 Alarm.com

Alarm.com Holdings, Inc. provides various Internet of Things (IoT) and solutions for residential, multi-family, small business, and enterprise commercial markets in North America and internationally. The company operates through two segments, Alarm.com and Other. It offers solutions to control and monitor security systems, as well as to IoT devices, including door locks, garage doors, thermostats, and video cameras; and video monitoring and analytics solutions, such as video analytics, escalated events, video doorbells, intelligent integration, live streaming, secure cloud storage, and video alerts. The company also provides scenes, video analytics triggers, thermostat schedules, responsive savings, precision comfort, energy usage monitoring, places feature, whole home water safety, and solar monitoring solutions, as well as heating, ventilation, and air conditioning monitoring services. In addition, it offers demand response programs, commercial grade video, commercial video analytics, access control, cell connectors, enterprise dashboard and multi-site management, energy savings, protection for valuables and inventory, temperature monitoring, and daily safeguard solutions. Further, the company provides a permission-based online portal that provides account management, sales, marketing, training, and support tools; a unified interface that displays key operational and customer experience indicators, including technician performance, system reliability and customer engagement metrics; installation and support services; MobileTech Application and Remote Toolkit; video health reports; smart gateway; AI-powered enhancements to professional monitoring and false alarm reduction; Web services and business intelligence; sales, marketing, and training services; and home builder programs. Additionally, it offers electric utility grid and water management, indoor gunshot detection, and health and wellness and data-rich emergency response solutions. The company was founded in 2000 and is based in Tysons, Virginia.