Deswell Industries (NASDAQ:DSWL – Get Free Report) and CPS Technologies (NASDAQ:CPSH – Get Free Report) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.
Profitability
This table compares Deswell Industries and CPS Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Deswell Industries | N/A | N/A | N/A |
| CPS Technologies | -1.94% | -3.96% | -3.01% |
Insider and Institutional Ownership
11.2% of CPS Technologies shares are held by institutional investors. 39.0% of Deswell Industries shares are held by company insiders. Comparatively, 15.6% of CPS Technologies shares are held 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.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Deswell Industries | $67.61 million | 0.81 | $11.14 million | $0.48 | 7.18 |
| CPS Technologies | $30.32 million | 3.22 | -$3.13 million | ($0.04) | -135.75 |
Deswell Industries has higher revenue and earnings than CPS Technologies. CPS Technologies is trading at a lower price-to-earnings ratio than Deswell Industries, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations for Deswell Industries and CPS Technologies, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Deswell Industries | 0 | 0 | 1 | 0 | 3.00 |
| CPS Technologies | 1 | 1 | 1 | 0 | 2.00 |
CPS Technologies has a consensus target price of $6.00, suggesting a potential upside of 10.50%. Given CPS Technologies’ higher possible upside, analysts plainly believe CPS Technologies is more favorable than Deswell Industries.
Risk & Volatility
Deswell Industries has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, CPS Technologies has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.
Summary
Deswell Industries beats CPS Technologies on 9 of the 13 factors compared between the two stocks.
About Deswell Industries
Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers in China, the United States, Europe, Hong Kong, the United Kingdom, Canada, and internationally. It operates through two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue audio mixers, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, wired and wireless audio streaming products, and headphones; printed circuit board assemblies; and medical products. The company was founded in 1987 and is based in Macau.
About CPS Technologies
CPS Technologies Corporation provides advanced material solutions to the transportation, automotive, energy, computing/internet, telecommunication, aerospace, defense, and oil and gas markets in the United States, Europe, and Asia. The company offers metal matrix composites such as baseplates for various applications, including motor controllers used in electric trains, subway cars, wind turbines, and hybrid and electric vehicles; hermetic packages for use in radar, satellite, and avionics applications; baseplates and housings used in modules built with wide band gap semiconductors; and lids and heat spreaders for use in internet switches and routers. It also assembles housings and packages that includes metal matrix composite components for hybrid circuits; and produces armor for naval and military applications. The company sells its products to microelectronics systems companies. The company was formerly known as Ceramics Process Systems Corporation and changed its name to CPS Technologies Corporation in March 2007. CPS Technologies Corporation was incorporated in 1984 and is based in Norton, Massachusetts.
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