NAPCO Security Technologies (NASDAQ:NSSC – Get Free Report) and Hexagon (OTCMKTS:HXGBY – Get Free Report) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.
Institutional and Insider Ownership
85.1% of NAPCO Security Technologies shares are held by institutional investors. 5.7% of NAPCO Security Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares NAPCO Security Technologies and Hexagon”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 | $202.32 million | 6.39 | $43.03 million | $1.21 | 29.87 |
| Hexagon | $6.14 billion | 4.55 | $698.53 million | $0.24 | 43.38 |
Hexagon has higher revenue and earnings than NAPCO Security Technologies. NAPCO Security Technologies is trading at a lower price-to-earnings ratio than Hexagon, indicating that it is currently the more affordable of the two stocks.
Dividends
NAPCO Security Technologies pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. Hexagon pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. NAPCO Security Technologies pays out 56.2% of its earnings in the form of a dividend. Hexagon pays out 33.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NAPCO Security Technologies has raised its dividend for 2 consecutive years. NAPCO Security Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of current ratings and price targets for NAPCO Security Technologies and Hexagon, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NAPCO Security Technologies | 0 | 2 | 5 | 0 | 2.71 |
| Hexagon | 1 | 2 | 1 | 0 | 2.00 |
NAPCO Security Technologies presently has a consensus price target of $50.50, suggesting a potential upside of 39.73%. Given NAPCO Security Technologies’ stronger consensus rating and higher possible upside, research analysts clearly believe NAPCO Security Technologies is more favorable than Hexagon.
Profitability
This table compares NAPCO Security Technologies and Hexagon’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NAPCO Security Technologies | 21.27% | 31.41% | 26.06% |
| Hexagon | 11.66% | 10.21% | 6.22% |
Volatility and Risk
NAPCO Security Technologies has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Hexagon has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.
Summary
NAPCO Security Technologies beats Hexagon on 13 of the 17 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 Hexagon
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Hexagon AB (publ) provides geospatial and industrial enterprise solutions worldwide. The company offers analysis and management, machine control, embedded electronics, monitoring, and planning and optimization solutions to agriculture division; 3D design and visualization, enterprise asset and asset lifecycle management, OT/ICS cyber security, engineering and schematics, enterprise project performance, operation and maintenance, procurement, fabrication, and construction services for asset lifecycle intelligence division; GNSS and SMART antennas, anti-jam systems, autonomy kits and services, correction services, GNSS/INS receivers and post processing, resilience and integrity technology, and visualization software for autonomy and positioning division; and 3D surveillance, AEC and survey software, geospatial content, machine control, digital realities platform, laser scanning and measurement tools, levels, total stations, airborne, monitoring, document and verification solutions, detection, GNSS, and mobile mapping system to geosystem division. It also provides CAD CAM and CAE software, CNC simulation and computed tomography software, measurement and inspection hardware and software, manufacturing project management, digital transformation for manufacturing, environmental health and safety, and quality management systems to manufacturing intelligence division; and HxGN mine protect, operate, monitoring, measure, and plan services, as well as HxGN autonomous and underground mining services to mining division. In addition, the company offers GIS, imagery analysis and data management, collaboration, government, transportation, and defense solutions; and utility GIS and outage management services, and public safety and geospatial platform to safety, infrastructure, and geospatial division. The company was incorporated in 1975 and is based in Stockholm, Sweden.
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