Contrasting LSI Industries (LYTS) and Research Frontiers (NASDAQ:REFR)

Research Frontiers (NASDAQ: REFR) and LSI Industries (NASDAQ:LYTS) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Research Frontiers and LSI Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Research Frontiers -255.89% -73.14% -66.66%
LSI Industries 1.13% 3.77% 2.83%

Valuation and Earnings

This table compares Research Frontiers and LSI Industries’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Research Frontiers $1.22 million 21.28 -$3.85 million ($0.14) -7.71
LSI Industries $328.82 million 0.43 $15.88 million $0.15 37.20

LSI Industries has higher revenue and earnings than Research Frontiers. Research Frontiers is trading at a lower price-to-earnings ratio than LSI Industries, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Research Frontiers has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, LSI Industries has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Research Frontiers and LSI Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Research Frontiers 0 0 1 0 3.00
LSI Industries 0 1 1 0 2.50

Research Frontiers currently has a consensus price target of $4.00, suggesting a potential upside of 270.37%. LSI Industries has a consensus price target of $8.00, suggesting a potential upside of 43.37%. Given Research Frontiers’ stronger consensus rating and higher probable upside, analysts clearly believe Research Frontiers is more favorable than LSI Industries.

Dividends

LSI Industries pays an annual dividend of $0.20 per share and has a dividend yield of 3.6%. Research Frontiers does not pay a dividend. LSI Industries pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

19.6% of Research Frontiers shares are owned by institutional investors. Comparatively, 76.5% of LSI Industries shares are owned by institutional investors. 11.6% of Research Frontiers shares are owned by company insiders. Comparatively, 5.4% of LSI Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

LSI Industries beats Research Frontiers on 9 of the 14 factors compared between the two stocks.

Research Frontiers Company Profile

Research Frontiers Incorporated (Research Frontiers) is engaged in the development and marketing of technology and devices to control the flow of light. The Company develops and licenses its patented suspended particle device (SPD-Smart) light-control technology to other companies that manufacture and market either the SPD-Smart chemical emulsion, light-control film made from the chemical emulsion, lamination services, electronics to power end-products incorporating the film, or the end-products themselves, such as smart windows, skylights and sunroofs. Research Frontiers has approximately 40 companies that, in the aggregate, are licensed to serve over four SPD-Smart application areas, including aerospace, architectural, automotive and marine products. Its VariGuard business unit markets and sells SPD-Smart products directly to customers for specialty uses, such as the protection of artwork and light-sensitive documents in museums and private collections.

LSI Industries Company Profile

LSI Industries Inc. is a provider of corporate visual image solutions to the petroleum/convenience store industry. The Company designs and develops aspects of the solid-state light emitting diode (LED) lighting, from the electronic circuit board, to the software to drive and control the LEDs, to the structure of the LED product. It operates through three segments: Lighting, Graphics and Technology. The Lighting Segment manufactures and markets outdoor and indoor lighting and lighting controls for the commercial, industrial and multi-site retail markets, including the quick-service and automotive markets. The Graphics Segment manufactures and sells exterior and interior visual image elements related to signage and graphics, including integrated digital solutions. The Technology Segment designs, engineers, and manufactures electronic circuit boards, assemblies, lighting controls and large format solid state LED video displays. The Company provides a range of lighting control solutions.

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