Reviewing Innovative Solutions & Support (NASDAQ:ISSC) and Monotype Imaging (NASDAQ:TYPE)

Innovative Solutions & Support (NASDAQ:ISSC) and Monotype Imaging (NASDAQ:TYPE) are both small-cap aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Risk & Volatility

Innovative Solutions & Support has a beta of -0.3, meaning that its share price is 130% less volatile than the S&P 500. Comparatively, Monotype Imaging has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares Innovative Solutions & Support and Monotype Imaging’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Innovative Solutions & Support -7.31% -3.24% -2.95%
Monotype Imaging 10.28% 10.65% 6.98%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Innovative Solutions & Support and Monotype Imaging, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innovative Solutions & Support 0 0 0 0 N/A
Monotype Imaging 0 3 0 0 2.00

Monotype Imaging has a consensus price target of $18.75, suggesting a potential downside of 5.68%. Given Monotype Imaging’s higher probable upside, analysts plainly believe Monotype Imaging is more favorable than Innovative Solutions & Support.

Valuation & Earnings

This table compares Innovative Solutions & Support and Monotype Imaging’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Innovative Solutions & Support $13.85 million 6.72 -$3.65 million N/A N/A
Monotype Imaging $246.74 million 3.33 $12.27 million $0.78 25.49

Monotype Imaging has higher revenue and earnings than Innovative Solutions & Support.

Insider and Institutional Ownership

23.9% of Innovative Solutions & Support shares are held by institutional investors. Comparatively, 89.3% of Monotype Imaging shares are held by institutional investors. 27.7% of Innovative Solutions & Support shares are held by insiders. Comparatively, 3.8% of Monotype Imaging shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Monotype Imaging pays an annual dividend of $0.46 per share and has a dividend yield of 2.3%. Innovative Solutions & Support does not pay a dividend. Monotype Imaging pays out 59.0% of its earnings in the form of a dividend. Monotype Imaging has increased its dividend for 6 consecutive years.

Summary

Monotype Imaging beats Innovative Solutions & Support on 10 of the 13 factors compared between the two stocks.

Innovative Solutions & Support Company Profile

Innovative Solutions and Support, Inc., a systems integrator, designs, manufactures, sells, and services flight guidance and cockpit display systems. It offers flat panel display systems that could replicate the display of analog or digital displays on one screen and could replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; flight management systems that complement the IS&S flat panel display system upgrade for commercial air transport aircraft; and integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single standby/backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. The company also provides digital air data computers, which calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information derived from the measure of air pressure; integrated air data computers and display units that calculate and convey air data information; altitude displays, which convey aircraft altitude measurements; airspeed displays, which convey various types of airspeed measurements; and altitude alerters that allow pilots to select a desired cruising altitude and provide warnings to pilots when an unacceptable deviation occurs. In addition, it offers engine and fuel displays that convey information related to fuel and oil levels, and engine activity, such as oil and hydraulic pressure and temperature; integrated global navigation systems; and utilities management systems. The company serves commercial air transport carriers and corporate/general aviation companies, Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, foreign militaries, and original equipment manufacturers. The company was founded in 1988 and is based in Exton, Pennsylvania.

Monotype Imaging Company Profile

Monotype Imaging Holdings Inc. develops, markets, and licenses technologies and fonts in the United States, Europe, the Middle East, Africa, Japan, and internationally. The company's solutions include type intellectual property (IP), enterprise software for visual content marketing solutions, custom type design services, and tools and technologies through direct sales channels, e-commerce platforms, and partner platforms. It also provides software technology and type IP solutions that ensure a consistent user experience across digital devices and display applications. The company's solutions enhances the visual expression of the makers of a range of devices, including laser printers, digital copiers and mobile devices, and others, as well as provide a text experience in various software applications and operating systems. It license its design assets and technologies to creative professionals, marketers, consumer device manufacturers, and ISVs and developers. Monotype Imaging Holdings Inc. is headquartered in Woburn, Massachusetts.

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