Critical Comparison: Research Frontiers (NASDAQ:REFR) and SMC (OTCMKTS:SMCAY)

SMC (OTCMKTS:SMCAY) and Research Frontiers (NASDAQ:REFR) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Earnings & Valuation

This table compares SMC and Research Frontiers”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SMC	$5.20 billion	5.21	$1.03 billion	$0.84	25.27
Research Frontiers	$1.34 million	28.13	-$1.31 million	($0.06)	-18.67

SMC has higher revenue and earnings than Research Frontiers. Research Frontiers is trading at a lower price-to-earnings ratio than SMC, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

SMC has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Research Frontiers has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

Insider and Institutional Ownership

1.0% of SMC shares are owned by institutional investors. Comparatively, 11.9% of Research Frontiers shares are owned by institutional investors. 6.5% of Research Frontiers shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for SMC and Research Frontiers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SMC	1	0	0	0	1.00
Research Frontiers	1	0	0	0	1.00

Profitability

This table compares SMC and Research Frontiers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SMC	19.72%	7.87%	7.16%
Research Frontiers	-153.95%	-90.72%	-54.95%

Summary

SMC beats Research Frontiers on 8 of the 11 factors compared between the two stocks.

About SMC

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers air management system, directional control valves, air cylinders, rotatory actuators/air grippers, electric actuators/cylinders, fitting and tubing, and modular F.R.L./pressure control equipment, as well as vacuum, air preparation, and lubrication equipment. It also provides flow control equipment, speed controllers, silencers/exhaust/blow guns/pressure gauges, switches/sensors/controllers, static neutralization equipment, and industrial device communication equipment/wireless system. In addition, the company offers process valves, chemical liquid valves/fittings and needle valves/tubing, process pumps, temperature control equipment, and process gas equipment, as well as high vacuum equipment, industrial filters/sintered metal elements, and pneumatic instrumentation and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.

About Research Frontiers

Research Frontiers Incorporated engages in the development and marketing of technology and devices to control the flow of light worldwide. It develops and licenses suspended particle device (SPD-Smart) light-control technology to companies that manufacture and market the SPD-Smart chemical emulsion, light-control film made from the chemical emulsion, the light-control panels made by laminating the film, and electronics to power end-products incorporating the film, as well as lamination services for and the end-products, such as windows, skylights, and sunroofs. The company's SPD-Smart light-control technology is used in various product applications, including windows, sunshades, skylights, and interior partitions for homes and buildings; automotive windows, sunroofs, sun-visors, sunshades, rear-view mirrors, instrument panels, and navigation systems; aircraft windows; museum display panels, and eyewear products; and flat panel displays for electronic products. It serves architectural, automotive, marine, and aerospace and appliance applications. The company was incorporated in 1965 and is headquartered in Woodbury, New York.