Critical Survey: Capstone Cos. (OTCMKTS:CAPC) versus NAPCO Security Technologies (NASDAQ:NSSC)

NAPCO Security Technologies (NASDAQ:NSSC) and Capstone Cos. (OTCMKTS:CAPC) are both small-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Volatility & Risk

NAPCO Security Technologies has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Capstone Cos. has a beta of 2.69, indicating that its share price is 169% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for NAPCO Security Technologies and Capstone Cos., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NAPCO Security Technologies	0	2	6	0	2.75
Capstone Cos.	0	0	0	0	0.00

NAPCO Security Technologies presently has a consensus target price of $47.83, indicating a potential upside of 1.28%. Given NAPCO Security Technologies’ stronger consensus rating and higher probable upside, research analysts clearly believe NAPCO Security Technologies is more favorable than Capstone Cos..

Insider & Institutional Ownership

85.1% of NAPCO Security Technologies shares are owned by institutional investors. 5.7% of NAPCO Security Technologies shares are owned by insiders. Comparatively, 40.0% of Capstone Cos. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares NAPCO Security Technologies and Capstone Cos.”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	$181.62 million	9.27	$43.41 million	$1.33	35.51
Capstone Cos.	$140,000.00	28.33	-$960,000.00	($0.01)	-7.99

NAPCO Security Technologies has higher revenue and earnings than Capstone Cos.. Capstone Cos. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NAPCO Security Technologies	24.70%	27.45%	23.48%
Capstone Cos.	N/A	-63.19%	-23.61%

Summary

NAPCO Security Technologies beats Capstone Cos. on 11 of the 14 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 Capstone Cos.

Capstone Companies, Inc., through its subsidiaries, operates as a designer, manufacturer, and marketer of consumer products to simplify daily living through technology. The company offers Connected Chef, a purpose-built kitchen appliance tablet with an integrated platform for cooking accessories, such as cutting board, as well as Smart Mirrors. It sells its products through sales agents, as well as directly to home-goods chain retailers. The company was formerly known as CHDT Corporation and changed its name to Capstone Companies, Inc. in June 2012. Capstone Companies, Inc. was incorporated in 1996 and is headquartered in Deerfield Beach, Florida.