Digi International (DGII) vs. Comtech Telecomm. (CMTL) Head-To-Head Analysis

Digi International (NASDAQ: DGII) and Comtech Telecomm. (NASDAQ:CMTL) are both small-cap communications & networking – nec companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Dividends

Comtech Telecomm. pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Digi International does not pay a dividend. Comtech Telecomm. pays out 56.3% of its earnings in the form of a dividend.

Institutional and Insider Ownership

77.4% of Digi International shares are held by institutional investors. Comparatively, 85.9% of Comtech Telecomm. shares are held by institutional investors. 6.8% of Digi International shares are held by company insiders. Comparatively, 7.0% of Comtech Telecomm. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Digi International has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Comtech Telecomm. has a beta of 1.9, indicating that its stock price is 90% more volatile than the S&P 500.

Profitability

This table compares Digi International and Comtech Telecomm.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digi International 5.16% 3.24% 2.95%
Comtech Telecomm. 3.11% 1.87% 1.04%

Earnings & Valuation

This table compares Digi International and Comtech Telecomm.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digi International $181.63 million 1.50 $9.36 million $0.35 29.00
Comtech Telecomm. $550.37 million 0.94 $15.82 million $0.71 30.86

Comtech Telecomm. has higher revenue and earnings than Digi International. Digi International is trading at a lower price-to-earnings ratio than Comtech Telecomm., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Digi International and Comtech Telecomm., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digi International 0 0 4 0 3.00
Comtech Telecomm. 0 2 3 0 2.60

Digi International currently has a consensus target price of $14.50, indicating a potential upside of 42.86%. Comtech Telecomm. has a consensus target price of $20.63, indicating a potential downside of 5.86%. Given Digi International’s stronger consensus rating and higher probable upside, equities analysts plainly believe Digi International is more favorable than Comtech Telecomm..

About Digi International

Digi International Inc. is a provider of mission and business-critical machine-to-machine (M2M) and Internet-of-Things (IoT) connectivity products and services. The Company creates connected products and deploys and manages critical communications infrastructures in a range of environments. It offers four categories of hardware products: cellular routers and gateways, radio frequency (RF), embedded and network products. The Company’s cellular product category includes its cellular routers and all gateways. The Company’s RF product category includes its XBee modules, as well as other RF Solutions. Its embedded product category includes Digi Connect and Rabbit embedded systems on module and single board computers. Its network product category includes console and serial servers and universal serial bus (USB) connected products. The Company’s service offerings include wireless design services, Digi Device Cloud (which includes Digi Remote Manager) and enterprise support services.

About Comtech Telecomm.

Comtech Telecommunications Corp. designs, develops, produces and markets products, systems and services for communications solutions. The Company operates through two segments: Commercial Solutions and Government Solutions. It offers communications solutions, including command and control technologies, safety and security technologies and enterprise technologies. Its Commercial Solutions segment provides satellite communications (such as satellite earth station modems and traveling wave tube amplifiers), public safety systems (such as next generation 911 technologies) and enterprise application technologies (such as messaging and trusted location-based technologies). The Government Solutions segment includes command and control technologies, troposcatter technologies, and radio frequency power and switching technologies. It serves system and network suppliers in the global satellite, defense, broadcast and aerospace industries, and the United States federal government, among others.

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