Comparing Knowles (KN) and LRAD (LRAD)

Knowles (NYSE:KN) and LRAD (NASDAQ:LRAD) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Profitability

This table compares Knowles and LRAD’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knowles 8.19% 6.08% 4.52%
LRAD -14.49% -5.11% -4.33%



Institutional and Insider Ownership

49.1% of LRAD shares are owned by institutional investors. 3.7% of Knowles shares are owned by company insiders. Comparatively, 3.8% of LRAD shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Knowles and LRAD’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Knowles $826.90 million 1.73 $67.70 million $0.80 19.78
LRAD $26.31 million 2.85 -$3.74 million N/A N/A

Knowles has higher revenue and earnings than LRAD.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Knowles and LRAD, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knowles 1 3 3 0 2.29
LRAD 0 0 0 0 N/A

Knowles currently has a consensus target price of $16.58, indicating a potential upside of 4.83%. Given Knowles’ higher possible upside, equities research analysts clearly believe Knowles is more favorable than LRAD.

Risk and Volatility

Knowles has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, LRAD has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

Knowles beats LRAD on 8 of the 11 factors compared between the two stocks.

Knowles Company Profile

Knowles Corporation designs, manufactures, and sells micro-acoustic, audio processing, and precision device solutions to the mobile consumer electronics, industrial, defense, aerospace medical, and telecommunications markets worldwide. The company operates in two segments, Audio and Precision Devices. The Audio segment designs and manufactures audio products, including microphones and balanced armature speakers, signal processing technologies, and software and algorithms used in applications that serve the mobile, ear, and Internet of Things markets. This segment also offers analog and digital micro-electro-mechanical systems, and electret condenser and smart microphones; and ultrasonic sensors and acoustic processors, as well as transducer products used primarily in hearing health and headset applications. The Precision Devices segment designs and delivers engineered capacitors and radio frequency devices for technically demanding applications, such as power supplies, radar, medical implants, and satellites for the industrial, defense, aerospace, medical, and telecommunications markets. The company also provides single layer electronic components to the radio frequency device, microwave, telecommunication, fiber optics, defense, and aerospace markets. It sells its products directly to original equipment manufacturers and to their contract manufacturers and suppliers, as well as through distributors. Knowles Corporation was founded in 1946 and is headquartered in Itasca, Illinois.

LRAD Company Profile

LRAD Corporation designs, develops, and commercializes directed sound technologies and products in North and South America, Europe, the Middle East, Africa, and Asia. It develops directed acoustic communication systems that focus sound over short and long distances. The company offers directional and omnidirectional acoustic systems and accessories. It offers Long Range Acoustic Device primarily for government, military, law enforcement, homeland and international security, private and commercial security, border security, maritime security, and wildlife preservation and control markets. The company was formerly known as American Technology Corporation and changed its name to LRAD Corporation in March 2010. LRAD Corporation was founded in 1980 and is headquartered in San Diego, California.

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