Reviewing Flex (NASDAQ:FLEX) & NAPCO Security Technologies (NASDAQ:NSSC)

NAPCO Security Technologies (NASDAQ:NSSC) and Flex (NASDAQ:FLEX) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Insider and Institutional Ownership

85.1% of NAPCO Security Technologies shares are held by institutional investors. Comparatively, 94.3% of Flex shares are held by institutional investors. 5.7% of NAPCO Security Technologies shares are held by company insiders. Comparatively, 0.6% of Flex shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

NAPCO Security Technologies has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, Flex has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for NAPCO Security Technologies and Flex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NAPCO Security Technologies	0	2	6	0	2.75
Flex	0	3	8	1	2.83

NAPCO Security Technologies presently has a consensus price target of $50.40, suggesting a potential upside of 40.47%. Flex has a consensus price target of $114.20, suggesting a potential downside of 0.22%. Given NAPCO Security Technologies’ higher possible upside, analysts clearly believe NAPCO Security Technologies is more favorable than Flex.

Valuation & Earnings

This table compares NAPCO Security Technologies and Flex”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NAPCO Security Technologies	$202.32 million	6.34	$43.03 million	$1.21	29.65
Flex	$27.91 billion	1.51	$880.00 million	$2.59	44.19

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

Profitability

This table compares NAPCO Security Technologies and Flex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NAPCO Security Technologies	21.27%	31.41%	26.06%
Flex	3.32%	23.15%	5.50%

Summary

Flex beats NAPCO Security Technologies on 9 of the 15 factors compared between the two stocks.

About NAPCO Security Technologies

Napco Security Technologies, Inc. develops, manufactures, and sells electronic security systems for commercial, residential, institutional, industrial, and governmental applications in the United States and internationally. Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; intrusion and fire alarm systems, consists of various detectors, a control panel, a digital keypad and signaling equipment; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks. The company’s alarm systems include automatic communicators, cellular communication devices, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panels, and area detectors; and video surveillance systems comprise video cameras, control panels, video monitors, or PCs. It also buys and resells various identification readers, video cameras, PC-based computers, and various peripheral equipment for access control and video surveillance systems; offers school security products; and markets peripheral and related equipment manufactured by other companies. The company markets and sells its products to independent distributors, dealers, and installers of security equipment. Napco Security Technologies, Inc. was founded in 1969 and is headquartered in Amityville, New York.

About Flex

Flex Ltd. provides technology, supply chain, and manufacturing solutions in Asia, the Americas, and Europe. It operates through three segments: Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker. The FAS segment offers flexible supply and manufacturing system comprising communications, enterprise and cloud solution, which includes data, edge, and communications infrastructure; lifestyle solution including appliances, consumer packaging, floorcare, micro mobility, and audio; and consumer devices, such as mobile and high velocity consumer devices. Its FRS segment provides complex ramps with specialized production models and critical environments, which comprise automotive including next generation mobility, autonomous, connectivity, electrification, and smart technologies; health solutions, such as medical devices, medical equipment, and drug delivery; and industrial solutions including capital equipment, industrial devices, and renewables and grid edge. The Nextracker segment offers solar tracker and software solutions, which are used in utility-scale and ground-mounted distributed generation solar projects. In addition, it provides a broad array of services including design and engineering, component services, rapid prototyping, fulfillment, and circular economy solutions. The company was formerly known as Flextronics International Ltd. and changed its name to Flex Ltd. in September 2016. Flex Ltd. was founded in 1969 and is headquartered in Singapore.