Magal Security Systems (MAGS) versus xG Technology (XGTI) Financial Review

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Magal Security Systems (NASDAQ:MAGS) and xG Technology (NASDAQ:XGTI) are both small-cap industrial products companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Magal Security Systems and xG Technology, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magal Security Systems 0 0 0 0 N/A
xG Technology 0 1 1 0 2.50

xG Technology has a consensus target price of $2.50, suggesting a potential upside of 575.68%. Given xG Technology’s higher possible upside, analysts clearly believe xG Technology is more favorable than Magal Security Systems.

Insider and Institutional Ownership

17.1% of Magal Security Systems shares are owned by institutional investors. Comparatively, 2.2% of xG Technology shares are owned by institutional investors. 24.4% of Magal Security Systems shares are owned by insiders. Comparatively, 9.7% of xG Technology shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Magal Security Systems has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, xG Technology has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500.

Valuation & Earnings

This table compares Magal Security Systems and xG Technology’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magal Security Systems $64.29 million 1.83 -$6.91 million N/A N/A
xG Technology $47.82 million 0.14 -$10.54 million $0.26 1.42

Magal Security Systems has higher revenue and earnings than xG Technology.

Profitability

This table compares Magal Security Systems and xG Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magal Security Systems 3.73% 4.36% 3.26%
xG Technology -59.22% -117.24% -47.50%

Summary

Magal Security Systems beats xG Technology on 10 of the 12 factors compared between the two stocks.

Magal Security Systems Company Profile

Magal Security Systems Ltd. develops, manufactures, markets, and sells perimeter intrusion detection sensors, physical barriers, video analytics and video management systems, and cyber security products and systems worldwide. It operates through three segments: Perimeter Products, Turnkey Projects, and Video and Cyber Security. The company offers perimeter security products that enable customers to monitor, limit, and control access by unauthorized personnel to specific regions or areas. Its perimeter security systems include fence mounted detection systems; detection grids, gates, and fences to protect water passages, VIP residences, and other outdoor applications; buried sensors; hybrid perimeter intrusion detection and intelligent lighting systems; electrical field disturbance sensors; and microwave sensors. The company also provides integrated intelligent video management solutions for security surveillance and business intelligence applications; and cyber-security products for monitoring, securing, and the active management of wired, wireless, and fiber optic communication networks, as well as turnkey solutions. In addition, it offers RoboGuard, a platform that runs on a rail along the perimeter of protected sites; and life safety/duress alarm products to protect personnel in prisons. Further, the company provides MTC-1500I, a dual technology outdoor surveillance system; Fortis4G, a fourth generation command and control system; StarNet 2, a security management system; and Network Manager, a middleware package. Its products are used to protect national borders, military bases, power plants, airports, sea ports, postal facilities, prisons, banks, retail operations, hospitals, municipal security, sporting events, and industrial locations from terrorism, theft, and other security threats. The company sells its products through system integrators and distribution channels. Magal Security Systems Ltd. was founded in 1965 and is headquartered in Yehud, Israel.

xG Technology Company Profile

xG Technology, Inc. designs, develops, and delivers advanced wireless communications solutions in North America, Europe, South America, Asia, and rest of world. Its business lines include the brands of Integrated Microwave Technologies LLC (IMT) and Vislink Communication Systems (VCS). IMT develops, manufactures, and sells microwave communications equipment utilizing COFDM (Coded Orthogonal Frequency Division Multiplexing) technology, a transmission technique that combines encoding technology with OFDM (Orthogonal Frequency Division Multiplexing) modulation to provide the low latency and high image clarity required for real-time live broadcasting video transmissions. The company develops integrated solutions that deliver video footage captured from aerial and ground-based sources to fixed and mobile receiver locations. VCS designs and manufactures products encompassing microwave radio components, satellite communication, cellular and wireless camera systems, and associated amplifier items for broadcast and media, law enforcement, public safety, and surveillance markets. It provides broadcast communication links for the collection of live news and sports and entertainment events for national broadcasters, multi-channel broadcasters, network owners and station groups, sports and live broadcasters, and hosted service providers; and secure video communications and mission-critical solutions for law enforcement, defense, and homeland security applications. The company markets its products through sales channels, including direct-to-end customer sales, network group sales, reseller/integrators, and original equipment manufacturers. xG Technology, Inc. was founded in 2002 and is headquartered in Sarasota, Florida.

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