Contrasting Microwave Filter (MFCO) and Varex Imaging (VREX)

Microwave Filter (OTCMKTS:MFCO) and Varex Imaging (NASDAQ:VREX) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Insider and Institutional Ownership

93.5% of Varex Imaging shares are held by institutional investors. 6.9% of Microwave Filter shares are held by insiders. Comparatively, 1.6% of Varex Imaging shares are held by 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.

Analyst Recommendations

This is a breakdown of current recommendations for Microwave Filter and Varex Imaging, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microwave Filter 0 0 0 0 N/A
Varex Imaging 0 2 1 0 2.33

Varex Imaging has a consensus price target of $33.00, suggesting a potential upside of 22.40%. Given Varex Imaging’s higher possible upside, analysts clearly believe Varex Imaging is more favorable than Microwave Filter.

Profitability

This table compares Microwave Filter and Varex Imaging’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Microwave Filter -6.06% -16.37% -10.87%
Varex Imaging 5.39% 15.16% 6.08%

Earnings and Valuation

This table compares Microwave Filter and Varex Imaging’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Microwave Filter $3.04 million 0.38 -$260,000.00 N/A N/A
Varex Imaging $698.10 million 1.47 $51.60 million $1.80 14.98

Varex Imaging has higher revenue and earnings than Microwave Filter.

Risk and Volatility

Microwave Filter has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Varex Imaging has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Summary

Varex Imaging beats Microwave Filter on 10 of the 11 factors compared between the two stocks.

About Microwave Filter

Microwave Filter Company, Inc. designs, develops, manufactures, and sells electronic filters for radio and microwave frequencies primarily in the United States. It manufactures RF filters and related components for eliminating interference and facilitating signal processing for cable television, broadcast, commercial and military communications, avionics, radar, navigation, and defense markets. The company also designs waveguide, stripline/microstrip, transmission line, miniature/subminiature, and lumped constant filters. Its configurations include bandpass, highpass, lowpass, bandstop, multiplexers, tunable notch, tunable bandpass, high power filters, amplitude equalized, delay equalized, and filter networks. In addition, the company, through its subsidiary, Niagara Scientific, Inc., custom designs case packing machines to automatically pack products into shipping cases for food processors and other commodity products; and sells spare parts. Microwave Filter Company, Inc. was founded in 1967 and is based in East Syracuse, New York.

About Varex Imaging

Varex Imaging Corporation designs and manufactures X-ray imaging components. The company operates in two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components comprising X-ray tubes, digital flat panel image detectors, high voltage connectors, image-processing software and workstations, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, ionization chambers, and buckys. This segment's products are used in a range of applications, including radiographic and fluoroscopic imaging, mammography, computed tomography, radiation therapy, and computer-aided detection. The Industrial segment designs, manufactures, sells, and services Linatron X-ray accelerators, X-ray tubes, digital flat panel detectors, high voltage connectors, and image-processing software for use in security and industrial inspection applications, such as airport security screening at ports and borders, as well as nondestructive examination in various applications. Varex Imaging Corporation sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. The company has operations in North America, Latin America, Europe, Russia, the Middle East, India, Africa, Asia, and Australia. Varex Imaging Corporation is headquartered in Salt Lake City, Utah.

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