DSP Group (NASDAQ: DSPG) and Rada Electronics Industries Limited (NASDAQ:RADA) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitabiliy, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Earnings & Valuation

This table compares DSP Group and Rada Electronics Industries Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DSP Group $133.28 million 1.96 $4.18 million $0.13 90.38
Rada Electronics Industries Limited $15.04 million 2.74 -$1.46 million ($0.21) -9.00

DSP Group has higher revenue and earnings than Rada Electronics Industries Limited. Rada Electronics Industries Limited is trading at a lower price-to-earnings ratio than DSP Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for DSP Group and Rada Electronics Industries Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DSP Group 0 2 5 0 2.71
Rada Electronics Industries Limited 0 0 0 0 N/A

DSP Group currently has a consensus price target of $14.17, suggesting a potential upside of 20.57%. Given DSP Group’s higher possible upside, equities analysts plainly believe DSP Group is more favorable than Rada Electronics Industries Limited.

Institutional and Insider Ownership

75.7% of DSP Group shares are owned by institutional investors. Comparatively, 0.3% of Rada Electronics Industries Limited shares are owned by institutional investors. 6.0% of DSP Group shares are owned by company insiders. Comparatively, 1.0% of Rada Electronics Industries Limited shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

DSP Group has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Rada Electronics Industries Limited has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Profitability

This table compares DSP Group and Rada Electronics Industries Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DSP Group 2.40% 3.47% 2.74%
Rada Electronics Industries Limited -17.90% -27.87% -14.21%

Summary

DSP Group beats Rada Electronics Industries Limited on 11 of the 12 factors compared between the two stocks.

About DSP Group

DSP Group, Inc. is a global provider of wireless and audio chipset solutions for converged communications. Delivering semiconductor system solutions with software and hardware reference designs, the Company enables original equipment manufacturers, original design manufacturers, consumer electronics manufacturers and service providers to develop new products. Its segments include Home, Office and Mobile. The Home segment includes wireless chipset solutions for converged communication at home. The Office segment offers solution for Voice-over-Internet protocol (VoIP) office products, including office solutions that provide businesses with VoIP terminals with converged voice and data applications. The Mobile segment offers products for the mobile market that provides voice enhancement, always-on and far-end noise elimination targeted for mobile phone and mobile headsets and wearable devices that incorporate its noise suppression and voice quality enhancement HDClear technology.

About Rada Electronics Industries Limited

RADA Electronic Industries Ltd. is an aviation and defense company. The Company develops, manufactures and sells defense electronics, including, avionics solutions (including avionics for unmanned aerial vehicles (UAVs)), airborne data/video recording and management systems, inertial navigation systems and tactical land radars for defense forces and border protection systems. The Company’s product lines include Military avionics (Data/video recorders, core avionics for aircraft and UAVs); Inertial navigation systems (INS) for aerial and land platforms, and Tactical Radars for defense forces and border protection systems (land-based). The Company’s INS products are used by multiple combat platforms and weapon systems. The Company develops ground radars for tactical applications, such as defense forces protection and border protection. Its products are primarily sold to governmental agencies, governmental authorities and government-owned companies.

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