TransAct Technologies (NASDAQ: TACT) and Stratasys (NASDAQ:SSYS) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, profitability, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for TransAct Technologies and Stratasys, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TransAct Technologies 0 0 1 0 3.00
Stratasys 5 9 4 0 1.94

TransAct Technologies presently has a consensus price target of $11.00, indicating a potential upside of 14.58%. Stratasys has a consensus price target of $24.21, indicating a potential upside of 5.69%. Given TransAct Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe TransAct Technologies is more favorable than Stratasys.

Earnings & Valuation

This table compares TransAct Technologies and Stratasys’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TransAct Technologies $55.67 million 1.27 $7.14 million $0.55 17.45
Stratasys $665.63 million 1.82 $30.05 million ($1.07) -21.41

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

Profitability

This table compares TransAct Technologies and Stratasys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TransAct Technologies 7.27% 16.68% 12.81%
Stratasys -8.33% 0.29% 0.24%

Insider and Institutional Ownership

37.2% of TransAct Technologies shares are owned by institutional investors. Comparatively, 67.0% of Stratasys shares are owned by institutional investors. 11.6% of TransAct Technologies shares are owned by company insiders. Comparatively, 4.3% of Stratasys shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

TransAct Technologies pays an annual dividend of $0.36 per share and has a dividend yield of 3.8%. Stratasys does not pay a dividend. TransAct Technologies pays out 65.5% of its earnings in the form of a dividend.

Volatility & Risk

TransAct Technologies has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Stratasys has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

About TransAct Technologies

TransAct Technologies Incorporated (TransAct) designs, develops and sells market-specific solutions, including printers, terminals, software and other products for transaction-based and other industries. The Company operates through the segment, which includes design, development, assembly and marketing of transaction printers and terminals, and providing printer and terminal related software, services, supplies and spare parts. Its thermal, inkjet and impact printers and terminals generate labels and transaction records, such as receipts, tickets, coupons, register journals and other documents, as well as printed logging, and plotting of oil field and well drilling data. Its products are sold under the AccuDate, Ithaca, RESPONDER, Epic, EPICENTRAL and Printrex brand names. It focuses on various markets, such as food safety, banking and point-of-sale (POS), casino and gaming, lottery and Printrex, Inc. (Printrex), which serves the oil and gas, medical and mobile printing markets.

About Stratasys

Stratasys, Inc. is a manufacturer of three-dimensional (3D) printers and rapid prototyping (RP) systems for the office-based RP and direct digital manufacturing (DDM) markets. The Company develops, manufactures and sells a product line of 3D printers and DDM systems (and related consumable materials) that create physical models from computer-aided design (CAD) designs. It also offer rapid prototyping and production part manufacturing services through its centers located in North America, Europe and Australia. In January 2009, the Company introduced the uPrint Personal 3D Printer. In January 2009, it began offering a thermoplastic for direct digital manufacturing and rapid prototyping called ULTEM 9085.

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