Analyzing Motorola Solutions (MSI) & Communications Systems (JCS)
Motorola Solutions (NYSE: MSI) and Communications Systems (NASDAQ:JCS) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
This is a summary of current recommendations for Motorola Solutions and Communications Systems, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Motorola Solutions presently has a consensus price target of $93.91, suggesting a potential upside of 3.92%. Communications Systems has a consensus price target of $6.00, suggesting a potential upside of 35.75%. Given Communications Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Communications Systems is more favorable than Motorola Solutions.
Earnings and Valuation
This table compares Motorola Solutions and Communications Systems’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Motorola Solutions||$6.19 billion||2.37||$1.60 billion||$3.79||23.84|
|Communications Systems||$91.24 million||0.43||-$1.87 million||($0.98)||-4.51|
Motorola Solutions has higher revenue and earnings than Communications Systems. Communications Systems is trading at a lower price-to-earnings ratio than Motorola Solutions, indicating that it is currently the more affordable of the two stocks.
Motorola Solutions pays an annual dividend of $1.88 per share and has a dividend yield of 2.1%. Communications Systems pays an annual dividend of $0.16 per share and has a dividend yield of 3.6%. Motorola Solutions pays out 49.6% of its earnings in the form of a dividend. Communications Systems pays out -16.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Motorola Solutions has raised its dividend for 6 consecutive years. Communications Systems is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Motorola Solutions has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, Communications Systems has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.
This table compares Motorola Solutions and Communications Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
88.0% of Motorola Solutions shares are owned by institutional investors. Comparatively, 31.8% of Communications Systems shares are owned by institutional investors. 2.5% of Motorola Solutions shares are owned by insiders. Comparatively, 17.5% of Communications Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Motorola Solutions beats Communications Systems on 9 of the 16 factors compared between the two stocks.
About Motorola Solutions
Motorola Solutions, Inc. is a provider of communication infrastructure, devices, accessories, software and services. The Company operates through two segments: Products and Services. The Company’s Products segment offers a portfolio of infrastructure, devices, accessories and software. The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers operating private communications networks and manage a mobile workforce. The Company’s Services segment provides a range of service offerings for government, public safety and commercial communication networks. The Services segment product lines include Integration services, Managed & Support services, and Integrated Digital Enhanced Network (iDEN) services.
About Communications Systems
Communications Systems, Inc. (CSI) operates directly and through its subsidiaries located in the United States, Costa Rica and the United Kingdom. The Company operates through three segments: Suttle, Transition Networks and JDL Technologies (JDL). The Company provides physical connectivity infrastructure products and services for global deployments of broadband networks. The Company is principally engaged through its subsidiary and business unit, Suttle, Inc., in the manufacture and sale of connectivity infrastructure products for broadband and voice communications, and through its another subsidiary and business unit, Transition Networks, Inc., in the manufacture and sale of core media conversion products for broadband networks. Through its JDL Technologies, Inc. subsidiary and business unit, CSI provides information technology (IT) solutions, including network design, computer infrastructure installations, IT service management, network security and network operation services.
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