Reviewing Daktronics (DAKT) and TransAct Technologies (TACT)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Daktronics 1.04% 3.01% 1.65%
TransAct Technologies 9.94% 20.93% 15.87%

Dividends

Daktronics pays an annual dividend of $0.28 per share and has a dividend yield of 3.6%. TransAct Technologies pays an annual dividend of $0.36 per share and has a dividend yield of 4.1%. Daktronics pays out 127.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TransAct Technologies pays out 51.4% of its earnings in the form of a dividend. TransAct Technologies has increased its dividend for 2 consecutive years. TransAct Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

59.1% of Daktronics shares are held by institutional investors. Comparatively, 43.8% of TransAct Technologies shares are held by institutional investors. 8.2% of Daktronics shares are held by company insiders. Comparatively, 12.5% of TransAct Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Daktronics has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, TransAct Technologies has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Valuation & Earnings

This table compares Daktronics and TransAct Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Daktronics $610.53 million 0.57 $5.56 million $0.22 35.14
TransAct Technologies $54.59 million 1.21 $5.43 million $0.70 12.69

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Daktronics and TransAct Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Daktronics 0 0 1 0 3.00
TransAct Technologies 0 0 1 0 3.00

Daktronics presently has a consensus price target of $10.00, indicating a potential upside of 29.37%. TransAct Technologies has a consensus price target of $14.00, indicating a potential upside of 57.66%. Given TransAct Technologies’ higher possible upside, analysts plainly believe TransAct Technologies is more favorable than Daktronics.

Summary

TransAct Technologies beats Daktronics on 10 of the 15 factors compared between the two stocks.

Daktronics Company Profile

Daktronics, Inc. designs, manufactures, and sells a range of electronic display systems and related products worldwide. It operates through five segments: Commercial, Live Events, High School Park and Recreation, Transportation, and International. The company offers video display systems, such as displays to show various levels of video, graphics, and animation; LED ribbon board displays; mobile and modular display systems; freeform LED displays, which include architectural lighting and display products; indoor and outdoor scoreboards for various sports, digit displays, scoring and timing controllers, statistics software, and other related products; and timing systems for sports events primarily aquatics and track competitions, as well as swimming touchpads, race start systems, and relay take-off platforms. It also provides message displays; ITS dynamic message signs, including LED displays for road management, mass transit, and aviation applications; digit and directional displays for use in parking facilities; and audio systems for outdoor sports venues. In addition, the company offers digital billboards and street furniture displays used to display images, which change at regular intervals for the out-of-home (OOH) advertising industry comprising Visiconn system and Venus Control Suite, a software application for controlling content and playback loops for digital billboard applications; and street furniture for digital OOH campaigns. Further, it provides digit and price displays, such as outdoor time and temperature displays, as well as Fuelight digit displays for the petroleum industry; and dynamic messaging systems for retailers, convenience stores, and other businesses, as well as maintenance and professional services related to its products. The company sells its products through direct sales and resellers. Daktronics, Inc. was founded in 1968 and is based in Brookings, South Dakota.

TransAct Technologies Company Profile

TransAct Technologies Incorporated designs, develops, assembles, and markets transaction-based and specialty printers and terminals in the United States and internationally. It offers thermal, inkjet, and impact printers and terminals to generate labels and transaction records, such as receipts, tickets, coupons, register journals, and other documents, as well as printed logging and plotting of data. The company also provides consumable products, including inkjet cartridges, ribbons, receipt papers, color thermal papers, food safety labels, and other printing supplies, as well as replacement parts; maintenance, repair, and testing services; and refurbished printers. In addition, it offers EPICENTRAL print system, a software solution that enables casino operators to create promotional coupons and marketing messages, and print them at the slot machine; and technical support services, as well as spare parts and accessories. Further, the company provides AccuDate terminals for the restaurant solutions market combine hardware and software in a device that includes an operating system, touchscreen, and one or two thermal print mechanisms. The company markets its products under the AccuDate, Epic, EPICENTRAL, Ithaca, Responder, and Printrex brand names for restaurant, point of sale automation and banking, casino and gaming, lottery, mobile, oil and gas, and hospitality markets, as well as government. It sells its products to original equipment manufacturers, value-added resellers, and distributors, as well as directly and online to end-users. TransAct Technologies Incorporated was founded in 1996 and is headquartered in Hamden, Connecticut.

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