Critical Contrast: CPS Technologies (NASDAQ:CPSH) versus Data I/O (NASDAQ:DAIO)

Data I/O (NASDAQ:DAIO) and CPS Technologies (NASDAQ:CPSH) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Insider & Institutional Ownership

37.0% of Data I/O shares are held by institutional investors. Comparatively, 11.2% of CPS Technologies shares are held by institutional investors. 2.6% of Data I/O 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.

Valuation and Earnings

This table compares Data I/O and CPS Technologies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Data I/O	$21.77 million	1.23	-$3.09 million	($0.40)	-7.15
CPS Technologies	$21.12 million	4.03	-$3.13 million	($0.04)	-118.25

Data I/O has higher revenue and earnings than CPS Technologies. CPS Technologies is trading at a lower price-to-earnings ratio than Data I/O, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Data I/O has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, CPS Technologies has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.

Profitability

This table compares Data I/O and CPS Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Data I/O	-16.16%	-21.44%	-15.24%
CPS Technologies	-1.94%	-3.96%	-3.01%

Analyst Recommendations

This is a breakdown of current recommendations for Data I/O and CPS Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Data I/O	1	1	2	1	2.60
CPS Technologies	1	1	1	0	2.00

Data I/O presently has a consensus price target of $5.11, suggesting a potential upside of 78.67%. CPS Technologies has a consensus price target of $6.00, suggesting a potential upside of 26.85%. Given Data I/O’s stronger consensus rating and higher possible upside, analysts clearly believe Data I/O is more favorable than CPS Technologies.

Summary

Data I/O beats CPS Technologies on 8 of the 15 factors compared between the two stocks.

About Data I/O

Data I/O Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of programming and security deployment systems and services for electronic device manufacturers in the United States, Europe, and internationally. Its programming system products are used to program integrated circuits (ICs) with the specific data for the ICs. The company offers PSV handlers off-line automated programming systems, such as PSV2800 automated programming system which focuses on high-volume manufacturing in a lower cost platform; PSV7000 automated programming system for security deployment upgrades; PSV5000 automated programming system that combines mid-range capacity and supports security deployment; and PSV3500 automated programming system which provides basic programming needs. It also provides SentriX security deployment system; and LumenX and non-automated FlashPAK III programming systems. In addition, the company offers hardware support, system installation and repair, and device programming services. It markets and sells its products to original equipment manufacturers in automotive and consumer electronics, internet of things, and industrial, as well as electronic manufacturing service contract manufacturers through direct sales, and indirect sales representatives and distributors. Data I/O Corporation was incorporated in 1969 and is headquartered in Redmond, Washington.

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.