Critical Review: Lianhe Sowell International Group (NASDAQ:LHSW) versus DMC Global (NASDAQ:BOOM)

Lianhe Sowell International Group (NASDAQ:LHSW) and DMC Global (NASDAQ:BOOM) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Lianhe Sowell International Group and DMC Global”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lianhe Sowell International Group	N/A	N/A	N/A	N/A	N/A
DMC Global	$642.85 million	0.22	-$94.45 million	($8.64)	-0.79

Lianhe Sowell International Group has higher earnings, but lower revenue than DMC Global.

Insider and Institutional Ownership

77.6% of DMC Global shares are held by institutional investors. 2.8% of DMC Global shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Lianhe Sowell International Group and DMC Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lianhe Sowell International Group	N/A	N/A	N/A
DMC Global	-17.54%	-1.27%	-0.48%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Lianhe Sowell International Group and DMC Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lianhe Sowell International Group	0	0	0	0	0.00
DMC Global	0	2	0	0	2.00

DMC Global has a consensus price target of $8.50, suggesting a potential upside of 25.18%. Given DMC Global’s stronger consensus rating and higher possible upside, analysts plainly believe DMC Global is more favorable than Lianhe Sowell International Group.

Summary

DMC Global beats Lianhe Sowell International Group on 5 of the 8 factors compared between the two stocks.

About Lianhe Sowell International Group

Lianhe Sowell International Group Ltd. is a holding company, which engages in trading of electronic products and software development. Its products include Intelligent traffic, low voltage Intelligent Integration, Industrial Intelligence, Industrial machine vision, and precision visual Al painting robot. The company was founded by Yue Zhu on April 6, 2007 and is headquartered in Shenzhen, China.

About DMC Global

DMC Global Inc. provides a suite of engineered products and various solutions for the construction, energy, industrial processing, and transportation markets worldwide. The company operates through three segments: Arcadia, DynaEnergetics, and NobelClad. The Arcadia segment manufactures, assembles, and sells architectural building products, including exterior and interior framing systems, curtain walls, windows, doors, and interior partitions; architectural components, architectural framing systems, entrance systems, and sun control products; sliding and glazing systems; and thermally broken steel, aluminum windows and doors, and wood doors and windows. It sells its products through a national in-house sales force for buildings, such as office towers, airports, hotels, education and athletic facilities, health care locations, government buildings, retail centers, mixed use, and multi-family residential buildings. The DynaEnergetics segment designs, manufactures, markets, and sells perforating systems, including initiation systems, shaped charges, detonating cords, gun hardware, and control panels; and perforating systems and associated hardware for the oil and gas industry. It sells its products through direct selling, distributors, and independent sales representatives. The NobelClad segment produces and sells explosion-welded clad metal plates for use in the construction of heavy, corrosion resistant pressure vessels, and heat exchangers for oil and gas, chemical and petrochemical, alternative energy, hydrometallurgy, aluminum production, shipbuilding, rail car manufacturing, power generation, and industrial refrigeration industries. It sells its products through direct sales personnel, program managers, and independent sales representatives. The company was formerly known as Dynamic Materials Corporation and changed its name to DMC Global Inc. in November 2016. DMC Global Inc. was founded in 1965 and is headquartered in Broomfield, Colorado.