Analyzing Telesat (NASDAQ:TSAT) and Iridium Communications (NASDAQ:IRDM)

Telesat (NASDAQ:TSAT) and Iridium Communications (NASDAQ:IRDM) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Volatility & Risk

Telesat has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500. Comparatively, Iridium Communications has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Profitability

This table compares Telesat and Iridium Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telesat	-16.09%	-6.83%	-2.60%
Iridium Communications	14.68%	19.41%	4.60%

Valuation & Earnings

This table compares Telesat and Iridium Communications”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telesat	$535.62 million	0.64	-$64.02 million	($4.47)	-5.62
Iridium Communications	$830.68 million	4.13	$112.78 million	$1.06	29.92

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Telesat and Iridium Communications, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telesat	0	0	0	0	0.00
Iridium Communications	0	1	4	0	2.80

Iridium Communications has a consensus target price of $34.25, suggesting a potential upside of 8.01%. Given Iridium Communications’ stronger consensus rating and higher probable upside, analysts clearly believe Iridium Communications is more favorable than Telesat.

Insider and Institutional Ownership

84.4% of Iridium Communications shares are held by institutional investors. 40.6% of Telesat shares are held by company insiders. Comparatively, 2.4% of Iridium Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Iridium Communications beats Telesat on 12 of the 14 factors compared between the two stocks.

About Telesat

Telesat Corporation, a satellite operator, provides mission-critical communications solutions to broadcast, enterprise, and consulting customers worldwide. The company’s satellite-based services allow direct-to-home (DTH) service providers to deliver television programming, audio, and information channels directly to customers’ homes; and enables broadcasters, cable networks, and DTH service providers to transmit television programming services. It offers value-added services that include satellite capacity, digital encoding of video channels, authorization, and uplinking and downlinking services; and occasional use services for the broadcast of video news, sports, and live event coverages. The company also provides satellite capacity and end-to-end services comprising space segment services and terrestrial facilities for enterprise connectivity, and internet and cellular backhaul; rural telephony to telecommunications carriers and network services integrators; and other satellite services. In addition, it offers direct-to-consumer broadband services; communications services for the oil and gas and mining industries; and broadband communication services to maritime and aeronautical markets comprising commercial airplanes and vessels. Further, the company operates satellite and hybrid satellite/terrestrial networks. Additionally, it provides satellite operator services; and consulting services related to space and earth segments, government studies, research and development, and satellite control services. The company offers its services primarily through a direct sales force. As of December 31, 2020, it operated a fleet of 15 in-orbit geostationary satellites and a Canadian payload on the ViaSat-1 satellite. The company was founded in 1969 and is headquartered in Ottawa, Canada. Telesat Corporation is a subsidiary of Loral Space & Communications Inc.

About Iridium Communications

Iridium Communications Inc. provides mobile voice and data communications services and products to businesses, the United States and international governments, non-governmental organizations, and consumers worldwide. The company offers postpaid mobile voice and data satellite communications; prepaid mobile voice satellite communications; push-to-talk; broadband data; and Internet of Things (IoT) services. It also provides hosted payload and other data services, such as satellite time and location services; and inbound connections from the public switched telephone network, short message, subscriber identity module, activation, customer reactivation, and other peripheral services. In addition, the company offers voice and data solutions comprising personnel tracking devices; asset tracking devices for equipment, vehicles, and aircrafts; beyond-line-of-sight aircraft communications applications; maritime communications applications; specialized communications solutions for high-value individuals; mobile communications and data devices for the military and other government agencies, such as secure satellite handsets, as well as netted voice, messaging, and paging services; and maintenance services for the United States government's dedicated gateway. Further, it provides satellite handsets, voice and data modems, broadband data devices, and IoT data devices; various accessories for its devices that include batteries, holsters, earbud headphones, portable auxiliary antennas, antenna adaptors, USB data cables, charging units, and others; and engineering and support services. Iridium Communications Inc. sells its products and services to commercial end users through a wholesale distribution network that include service providers, and value-added resellers and manufacturers. The company was formerly known as Iridium Holdings LLC and changed its name to Iridium Communications Inc. in September 2009. Iridium Communications Inc. is headquartered in McLean, Virginia.