Financial Review: TransAct Technologies (TACT) versus Fortinet (FTNT)

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Fortinet (NASDAQ: TACT) and TransAct Technologies (NASDAQ:TACT) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Dividends

TransAct Technologies pays an annual dividend of $0.36 per share and has a dividend yield of 2.6%. Fortinet does not pay a dividend. TransAct Technologies pays out 60.0% of its earnings in the form of a dividend.

Institutional and Insider Ownership

71.2% of Fortinet shares are owned by institutional investors. Comparatively, 41.4% of TransAct Technologies shares are owned by institutional investors. 17.7% of Fortinet shares are owned by insiders. Comparatively, 12.5% of TransAct Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Fortinet and TransAct Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fortinet $1.49 billion 10.01 $31.39 million $0.52 170.06
TransAct Technologies $56.31 million 1.84 $3.21 million $0.60 23.42

Fortinet has higher revenue and earnings than TransAct Technologies. TransAct Technologies is trading at a lower price-to-earnings ratio than Fortinet, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Fortinet and TransAct Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fortinet 1 13 9 0 2.35
TransAct Technologies 0 0 1 0 3.00

Fortinet presently has a consensus price target of $68.16, indicating a potential downside of 22.92%. TransAct Technologies has a consensus price target of $17.00, indicating a potential upside of 21.00%. Given TransAct Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe TransAct Technologies is more favorable than Fortinet.

Risk & Volatility

Fortinet has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, TransAct Technologies has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Profitability

This table compares Fortinet and TransAct Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fortinet 5.43% 17.51% 5.39%
TransAct Technologies 5.91% 18.19% 14.03%

About Fortinet

Fortinet, Inc. provides broad, automated, and integrated cybersecurity solutions worldwide. It offers FortiGate hardware and software licenses that provide various security and networking functions, including firewall, intrusion prevention, anti-malware, virtual private network, application control, Web filtering, anti-spam, and WAN acceleration; and FortiSandbox technology that delivers proactive detection and mitigation services; and FortiSIEM family of products, which offers a cloud-ready security information and event management solution for enterprises and service providers. The company also provides FortiSwitch product family that offers secure switching solutions for connecting customers end devices, such as computers and laptops, as well as an expanding field of Internet of Things devices; and Fortinet Management and Analysis products consisting of FortiManager and FortiAnalyzer hardware and software products. In addition, it provides security subscription, technical support, professional, and training services. The company sells its security solutions to channel partners; and directly to end-customers, including small and medium-sized businesses, large enterprises, and government organizations in a range of industries consisting of telecommunications, technology, government, financial services, education, retail, manufacturing, and healthcare. Fortinet, Inc. was founded in 2000 and is headquartered in Sunnyvale, California.

About TransAct Technologies

TransAct Technologies Incorporated designs, develops, assembles, and markets transaction-based and specialty printers and terminals in the United States and internationally. It offers thermal, inkjet, and impact printers and terminals to generate labels and transaction records, such as receipts, tickets, coupons, register journals, and other documents, as well as printed logging and plotting of data. The company also provides consumable products, including inkjet cartridges, ribbons, receipt papers, color thermal papers, food safety labels, and other printing supplies, as well as replacement parts; maintenance, repair, and testing services; and refurbished printers. In addition, it offers EPICENTRAL print system, a software solution that enables casino operators to create promotional coupons and marketing messages, and print them at the slot machine; and technical support services, as well as spare parts and accessories. Further, the company provides AccuDate terminals for the restaurant solutions market combine hardware and software in a device that includes an operating system, touchscreen, and one or two thermal print mechanisms. The company markets its products under the AccuDate, Epic, EPICENTRAL, Ithaca, Responder, and Printrex brand names for restaurant, point of sale automation and banking, casino and gaming, lottery, mobile, oil and gas, and hospitality markets, as well as government. It sells its products to original equipment manufacturers, value-added resellers, and distributors, as well as directly and online to end-users. TransAct Technologies Incorporated was founded in 1996 and is headquartered in Hamden, Connecticut.

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