Inseego (NASDAQ: INSG) and TESSCO Technologies (NASDAQ:TESS) are both small-cap technology companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Inseego and TESSCO Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inseego 0 1 1 0 2.50
TESSCO Technologies 0 0 0 0 N/A

Inseego currently has a consensus target price of $1.88, indicating a potential upside of 7.76%. Given Inseego’s higher probable upside, analysts clearly believe Inseego is more favorable than TESSCO Technologies.

Valuation and Earnings

This table compares Inseego and TESSCO Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inseego $243.55 million 0.42 -$60.57 million ($1.22) -1.43
TESSCO Technologies $533.29 million 0.27 $1.44 million $0.34 50.00

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

Profitability

This table compares Inseego and TESSCO Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inseego -30.71% N/A -24.17%
TESSCO Technologies 0.51% 3.09% 1.80%

Insider & Institutional Ownership

12.1% of Inseego shares are owned by institutional investors. Comparatively, 58.3% of TESSCO Technologies shares are owned by institutional investors. 4.1% of Inseego shares are owned by insiders. Comparatively, 26.9% of TESSCO Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

TESSCO Technologies pays an annual dividend of $0.80 per share and has a dividend yield of 4.7%. Inseego does not pay a dividend. TESSCO Technologies pays out 235.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Inseego has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, TESSCO Technologies has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Summary

TESSCO Technologies beats Inseego on 10 of the 14 factors compared between the two stocks.

Inseego Company Profile

Novatel Wireless, Inc. is a provider of intelligent wireless solutions for the mobile communications market. The Company’s range of products includes intelligent mobile hotspots, universal serial bus (USB) modems, embedded modules, integrated asset-management and mobile tracking machine-to-machine (M2M) devices, communications and applications software and cloud services. It operates in the wireless communications industry in two product categories: M2M Products and Solutions, and Mobile Computing Solutions. M2M Products and Solutions includes its M2M embedded modules, integrated M2M communications devices, Ctrack fleet management platform and its service delivery platforms, Crossroads, DMS, the N4A DM and N4A CMS that provide device management and service enablement. Mobile Computing Solutions includes its MiFi brand of intelligent mobile hotspot devices, USB modems and embedded modules that enable Internet access and data transmission and services via cellular wireless networks.

TESSCO Technologies Company Profile

TESSCO Technologies Incorporated architects and delivers the product and value chain solutions to organizations responsible for building, operating, maintaining and reselling cellular, mobile communications, wireless-fidelity (Wi-Fi), machine-to-machine, Internet of Things and wireless backhaul systems. The Company provides marketing and sales services, knowledge and supply chain management, product-solution delivery and control systems utilizing Internet and information technology. Its customers include a diversified mix of carrier and public network operators, tower owners, program managers, contractors and integrators, wireless Internet service providers, industrial and enterprise self-maintained users (including railroads, utilities, mining operators, oil and gas operators and technicians), governments, manufacturers, value-added resellers, tier 1, 2 and 3 retail carrier stores and their independent agents, dealers and consumers, as well as other local and national retailers.

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