Brady (NYSE: BRC) and Daktronics (NASDAQ:DAKT) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility and Risk
Brady has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Daktronics has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.
Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.2%. Daktronics pays an annual dividend of $0.28 per share and has a dividend yield of 3.1%. Brady pays out 47.4% of its earnings in the form of a dividend. Daktronics pays out 121.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brady has raised its dividend for 32 consecutive years.
This table compares Brady and Daktronics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Brady and Daktronics’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Brady||$1.11 billion||1.73||$95.64 million||$1.75||21.20|
|Daktronics||$586.54 million||0.69||$10.34 million||$0.23||39.30|
Brady has higher revenue and earnings than Daktronics. Brady is trading at a lower price-to-earnings ratio than Daktronics, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
79.2% of Brady shares are owned by institutional investors. Comparatively, 56.1% of Daktronics shares are owned by institutional investors. 15.6% of Brady shares are owned by company insiders. Comparatively, 8.2% of Daktronics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and target prices for Brady and Daktronics, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Brady presently has a consensus target price of $39.00, suggesting a potential upside of 5.12%. Daktronics has a consensus target price of $10.00, suggesting a potential upside of 10.62%. Given Daktronics’ higher probable upside, analysts plainly believe Daktronics is more favorable than Brady.
Brady beats Daktronics on 13 of the 17 factors compared between the two stocks.
Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.
Daktronics, Inc. designs, manufactures, and sells a range of electronic display systems and related products worldwide. It operates through five segments: Commercial, Live Events, High School Park and Recreation, Transportation, and International. The company offers video display systems, such as displays to show various levels of video, graphics, and animation, as well as controllers; LED ribbon board displays; mobile and modular display systems; freeform LED displays, which include architectural lighting and display products; indoor and outdoor scoreboards for various sports, digit displays, scoring and timing controllers, statistics software, and other related products; and timing systems for sports events primarily aquatics and track competitions, as well as swimming touchpads, race start systems, and relay take-off platforms. It also provides message displays; ITS dynamic message signs, including LED displays for road management, mass transit, and aviation applications; digit and directional displays for use in parking facilities; and audio systems for outdoor sports venues. In addition, the company offers digital billboards and street furniture displays used to display static images, which change at regular intervals for the out-of-home (OOH) advertising industry; Visiconn system and Venus Control Suite, a software application for controlling content and playback loops for digital billboard applications; and street furniture comprising advertising light boxes for digital OOH campaigns. Further, it provides digit and price displays, such as outdoor time and temperature displays, as well as Fuelight digit displays for the petroleum industry; and dynamic messaging systems for retailers, convenience stores, and other businesses, as well as maintenance and professional services related to its products. The company sells its products through direct sales and resellers. Daktronics, Inc. was founded in 1968 and is based in Brookings, South Dakota.
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