Electro-Sensors (NASDAQ:ELSE) and Transcat (NASDAQ:TRNS) Financial Analysis
by Sarita Garza · The Markets DailyTranscat (NASDAQ:TRNS – Get Free Report) and Electro-Sensors (NASDAQ:ELSE – Get Free Report) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.
Risk and Volatility
Transcat has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Electro-Sensors has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500.
Institutional and Insider Ownership
98.3% of Transcat shares are held by institutional investors. Comparatively, 11.7% of Electro-Sensors shares are held by institutional investors. 2.8% of Transcat shares are held by company insiders. Comparatively, 13.3% of Electro-Sensors shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Transcat and Electro-Sensors”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Transcat | $278.42 million | 2.68 | $14.52 million | $0.85 | 93.93 |
| Electro-Sensors | $10.14 million | 1.60 | $310,000.00 | $0.09 | 51.00 |
Transcat has higher revenue and earnings than Electro-Sensors. Electro-Sensors is trading at a lower price-to-earnings ratio than Transcat, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Transcat and Electro-Sensors, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Transcat | 2 | 0 | 2 | 1 | 2.40 |
| Electro-Sensors | 0 | 1 | 0 | 0 | 2.00 |
Transcat currently has a consensus target price of $105.33, indicating a potential upside of 31.93%. Given Transcat’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Transcat is more favorable than Electro-Sensors.
Profitability
This table compares Transcat and Electro-Sensors’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Transcat | 2.47% | 6.15% | 4.15% |
| Electro-Sensors | 3.02% | 2.10% | 1.98% |
Summary
Transcat beats Electro-Sensors on 13 of the 15 factors compared between the two stocks.
About Transcat
Transcat, Inc. provides calibration and laboratory instrument services in the United States, Canada, and internationally. It operates through two segments: Service and Distribution. The Service segment offers calibration, repair, inspection, analytical qualification, preventative maintenance, consulting, and other related services. This segment also provides CalTrak, a proprietary document and asset management system that is used to manage the workflow of its calibration service centers and customers’ assets; and Compliance, Control and Cost, an online customer portal that provides its customers with web-based asset management capability, as well as a safe and secure off-site archive of calibration and other service records. The Distribution segment sells and rents test, measurement, and control instruments for customers’ test and measurement instrumentation needs, as well as value added services, such as calibration/certification of equipment purchase, equipment rental, used equipment for sale, and equipment kitting. This segment markets and sells its products through website, digital and print advertising, proactive outbound sales, and an inbound call center. The company provides services and products to highly regulated industries, principally life science, which includes companies in the pharmaceutical, biotechnology, medical device, and other FDA-regulated industries; and additional industries, including aerospace and defense industrial manufacturing, energy and utilities, and other industries that require accuracy in processes and confirmation of the capabilities of their equipment. Transcat, Inc. was incorporated in 1964 and is headquartered in Rochester, New York.
About Electro-Sensors
Electro-Sensors, Inc. engages in the manufacture and selling of industrial production monitoring and process control systems. Its products include shaft speed witches; wireless hazard monitoring; temperature sensor; slide gate and angle position; bearing sensors and belt alignment; and motor drive control. The company was founded by James P. Slattery in 1965 and is headquartered in Minnetonka, MN.