Rada Electronics Industries Limited (NASDAQ: RADA) and NETGEAR (NASDAQ:NTGR) are both small-cap aerospace companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Rada Electronics Industries Limited and NETGEAR, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rada Electronics Industries Limited | 0 | 0 | 0 | 0 | N/A |
| NETGEAR | 1 | 2 | 4 | 0 | 2.43 |
NETGEAR has a consensus price target of $63.00, suggesting a potential upside of 32.63%. Given NETGEAR’s higher probable upside, analysts plainly believe NETGEAR is more favorable than Rada Electronics Industries Limited.
Institutional & Insider Ownership
0.9% of Rada Electronics Industries Limited shares are held by institutional investors. Comparatively, 98.8% of NETGEAR shares are held by institutional investors. 1.0% of Rada Electronics Industries Limited shares are held by company insiders. Comparatively, 6.2% of NETGEAR shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Rada Electronics Industries Limited and NETGEAR’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% |
| NETGEAR | 5.42% | 10.67% | 7.43% |
Valuation and Earnings
This table compares Rada Electronics Industries Limited and NETGEAR’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Rada Electronics Industries Limited | $17.63 million | 3.77 | -$7,000.00 | ($0.05) | -60.00 |
| NETGEAR | $1.36 billion | 1.10 | $134.02 million | $2.18 | 21.79 |
NETGEAR has higher revenue and earnings than Rada Electronics Industries Limited. Rada Electronics Industries Limited is trading at a lower price-to-earnings ratio than NETGEAR, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Rada Electronics Industries Limited has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, NETGEAR has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.
Summary
NETGEAR beats Rada Electronics Industries Limited on 11 of the 12 factors compared between the two stocks.
Rada Electronics Industries Limited Company Profile
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.
NETGEAR Company Profile
NETGEAR, Inc. designs, develops and markets networking solutions and smart connected products for consumers, businesses and service providers. The Company’s product line consists of devices, such as network attached storage, Internet protocol (IP) security cameras, and home automation devices and services. The Company’s segments include retail, commercial and service provider. The retail business unit is focused on individual consumers and consists of whole home wireless fidelity (WiFi) networking solutions and Smart connected products. The commercial business unit is focused on small and medium-sized businesses and consists of business networking, storage and security solutions. The service provider business unit is focused on the service provider market and consists of made-to-order and retail-proven whole home networking hardware and software solutions, including fourth-generation (4G) long term evolution (LTE) hotspots sold to service providers for sale to their subscribers.
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