Napco Security Technologies, Inc. (NASDAQ:NSSC) Financial Analysis

• Napco Security Technologies has a Return on Invested Capital (ROIC) of 25.88% and a Weighted Average Cost of Capital (WACC) of 12.03%, indicating efficient capital use.
• Omega Flex leads with the highest ROIC to WACC ratio among peers, showcasing its superior efficiency in generating returns over its cost of capital.
• Transcat, Inc. and Northwest Pipe Company show ROIC to WACC ratios below or barely above 1, signaling challenges in covering their cost of capital.

Napco Security Technologies, Inc. (NASDAQ:NSSC) is a company that specializes in the development and manufacturing of security products, including access control systems, alarm systems, and locking devices. The company operates in a competitive industry with peers such as UFP Technologies, Omega Flex, Transcat, Northwest Pipe Company, and Northrim BanCorp. These companies also focus on various industrial and technological solutions.

Napco Security Technologies boasts a Return on Invested Capital (ROIC) of 25.88% and a Weighted Average Cost of Capital (WACC) of 12.03%. This results in a ROIC to WACC ratio of 2.15, indicating that Napco is generating returns well above its cost of capital. This suggests that the company is effectively using its capital to create value for its shareholders.

In comparison, UFP Technologies has a ROIC of 11.27% and a WACC of 8.67%, leading to a ROIC to WACC ratio of 1.30. While UFP is generating returns above its cost of capital, it is not as efficient as Napco. Omega Flex, however, stands out with a ROIC of 18.75% and a WACC of 6.02%, resulting in a ROIC to WACC ratio of 3.12, the highest among the peers.

Transcat, Inc. shows a ROIC of 6.13% against a WACC of 7.47%, resulting in a ROIC to WACC ratio of 0.82. This indicates that Transcat is not covering its cost of capital, which could be a concern for investors. Similarly, Northwest Pipe Company has a ROIC of 7.69% and a WACC of 7.54%, with a ratio of 1.02, barely exceeding its cost of capital.

Northrim BanCorp, Inc. presents a ROIC of 10.99% and a WACC of 7.54%, leading to a ROIC to WACC ratio of 1.46. This shows that Northrim is generating returns above its cost of capital, but not as efficiently as Napco or Omega Flex. These metrics are crucial for investors assessing the financial health and investment potential of these companies.