Rada Electronics Industries Limited (NASDAQ: RADA) and DSP Group (NASDAQ:DSPG) are both small-cap aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.
Institutional and Insider Ownership
0.9% of Rada Electronics Industries Limited shares are owned by institutional investors. Comparatively, 75.8% of DSP Group shares are owned by institutional investors. 1.0% of Rada Electronics Industries Limited shares are owned by company insiders. Comparatively, 6.0% of DSP Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility & Risk
Rada Electronics Industries Limited has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, DSP Group has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.
Profitability
This table compares Rada Electronics Industries Limited and DSP Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rada Electronics Industries Limited | -3.41% | -6.38% | -3.36% |
| DSP Group | 2.40% | 3.47% | 2.74% |
Analyst Ratings
This is a summary of recent ratings and target prices for Rada Electronics Industries Limited and DSP Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rada Electronics Industries Limited | 0 | 0 | 0 | 0 | N/A |
| DSP Group | 0 | 2 | 5 | 0 | 2.71 |
DSP Group has a consensus target price of $14.17, indicating a potential upside of 20.57%. Given DSP Group’s higher possible upside, analysts plainly believe DSP Group is more favorable than Rada Electronics Industries Limited.
Earnings & Valuation
This table compares Rada Electronics Industries Limited and DSP Group’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Rada Electronics Industries Limited | $17.63 million | 3.31 | -$7,000.00 | ($0.05) | -53.60 |
| DSP Group | $133.28 million | 1.96 | $4.18 million | $0.13 | 90.38 |
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.
Summary
DSP Group beats Rada Electronics Industries Limited on 11 of the 12 factors compared between the two stocks.
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.
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.
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