Investors are evaluating the potential of two small-cap aerospace companies, Park Aerospace (NYSE: PKE) and Optex Systems (NASDAQ: OPXS). A comparison based on profitability, earnings, valuation, analyst recommendations, risk, institutional ownership, and dividends reveals distinct characteristics that may influence investment decisions.
Volatility and Risk Assessment
The share price volatility of Park Aerospace is significantly lower than the broader market, with a beta of 0.33. This figure indicates that its share price is approximately 67% less volatile than the S&P 500. In contrast, Optex Systems holds a beta of 0.61, reflecting a 39% lower volatility in comparison to the same benchmark. Such metrics suggest that Park Aerospace may be a more stable investment option, particularly for risk-averse investors.
Valuation and Earnings Comparison
When examining gross revenue and earnings per share (EPS), Park Aerospace outperforms Optex Systems. The former has higher revenue figures and earnings, indicating a stronger financial position. Nonetheless, Optex Systems is currently trading at a lower price-to-earnings ratio, suggesting it may present a more affordable investment opportunity relative to its earnings potential.
In terms of profitability, metrics such as net margins, return on equity, and return on assets further illuminate the financial health of both companies. Investors should consider these figures carefully when assessing long-term growth prospects.
Analyst ratings for both companies show a variety of perspectives, with recent reports compiled by MarketBeat providing insights into price targets. Such information can be pivotal for investors looking to make informed choices.
Institutional Ownership and Dividends
Institutional investment plays a significant role in determining the market outlook for these companies. A substantial 77.8% of Park Aerospace shares are held by institutional investors, while Optex Systems has 19.1% institutional ownership. This strong institutional backing for Park Aerospace suggests a belief in its potential to outperform the market over time.
Additionally, insider ownership is notable, with Park Aerospace having 11.3% of its shares held by company insiders compared to 30.3% for Optex Systems. High insider ownership can indicate management’s confidence in the company’s future.
In terms of dividend payments, Park Aerospace offers an annual dividend of $0.50 per share, resulting in a dividend yield of 2.5%. Conversely, Optex Systems pays an annual dividend of $0.08 per share, translating to a yield of 0.6%. It is worth noting that Park Aerospace has a high payout ratio of 138.9% of its earnings, which raises concerns about its ability to sustain future dividend payments. Optex Systems has a more conservative payout ratio at 10.7%.
Company Profiles
Park Aerospace Corp., founded in 1954 and based in Westbury, New York, specializes in producing advanced composite materials for the aerospace sector. The company develops solutions used in various applications, including jet engines and military aircraft. Its product line includes film adhesives and materials for lightning strike protection, among others. The company was formerly known as Park Electrochemical Corp. before rebranding in July 2019.
On the other hand, Optex Systems Holdings, Inc., established in 1987 and headquartered in Richardson, Texas, focuses on manufacturing optical sighting systems and assemblies. Its products serve the U.S. Department of Defense and include a range of periscopes and sighting systems for military vehicles. As a subsidiary of Sileas Corporation, Optex Systems provides vital support for various defense applications.
In conclusion, while both Park Aerospace and Optex Systems have their merits, the analysis indicates that Optex Systems outperforms Park Aerospace in seven of the thirteen factors assessed. Investors should weigh the strengths and weaknesses of each company against their individual investment strategies and risk tolerance.
