Head-To-Head Analysis: Comtech Telecommunications (NASDAQ:CMTL) versus Silicom (NASDAQ:SILC)

Silicom (NASDAQ:SILC) and Comtech Telecommunications (NASDAQ:CMTL) are both small-cap technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for Silicom and Comtech Telecommunications, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silicom	1	0	1	0	2.00
Comtech Telecommunications	1	1	1	0	2.00

Silicom currently has a consensus price target of $60.00, indicating a potential upside of 37.87%. Comtech Telecommunications has a consensus price target of $2.50, indicating a potential upside of 70.65%. Given Comtech Telecommunications’ higher possible upside, analysts clearly believe Comtech Telecommunications is more favorable than Silicom.

Valuation and Earnings

This table compares Silicom and Comtech Telecommunications”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Silicom	$75.43 million	3.32	-$11.48 million	($1.71)	-25.45
Comtech Telecommunications	$499.53 million	0.09	-$155.30 million	($2.21)	-0.66

Silicom has higher earnings, but lower revenue than Comtech Telecommunications. Silicom is trading at a lower price-to-earnings ratio than Comtech Telecommunications, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Silicom and Comtech Telecommunications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Silicom	-12.98%	-8.37%	-6.26%
Comtech Telecommunications	-5.52%	9.77%	1.05%

Risk and Volatility

Silicom has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500. Comparatively, Comtech Telecommunications has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.

Insider and Institutional Ownership

52.8% of Silicom shares are owned by institutional investors. 25.4% of Silicom shares are owned by insiders. Comparatively, 2.2% of Comtech Telecommunications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

About Silicom

Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for servers, server-based systems, and communications devices. It offers server network interface cards; and smart cards, such as smart server adapters, which include redirector and switching cards, encryption and data compression hardware acceleration cards, forward error correction acceleration and offloading cards, time synchronization cards, and field programmable gate array-based cards. The company also provides virtualized and universal customer-premises equipment; and edge devices for SD-WAN, secure access service edge, Telco dedicated routers, and NFV deployments. It serves original equipment manufacturing, cloud, telco, mobile, and related service provider markets. The company operates in the United States, North America, Israel, Europe, and the Asia Pacific. Silicom Ltd. was incorporated in 1987 and is headquartered in Kfar Saba, Israel.

About Comtech Telecommunications

Comtech Telecommunications Corp., together with its subsidiaries, engages in the provision of next-gen telecommunication solutions in the United States and internationally. The company’s Satellite and Space Communications segment offers satellite ground station technologies, services and system integration that facilitates the transmission of voice, video, and data over GEO, MEO and LEO satellite constellations, including solid-state and traveling wave tube power amplifiers, modems, VSAT platforms, and frequency converters; and satellite communications and tracking antenna systems, including high precision full motion fixed and mobile X/Y tracking antennas, RF feeds, reflectors, and radomes. This segment also provides over-the-horizon microwave troposcatter equipment that can transmit digitized voice, video, and data over distances up to 200 miles using the troposphere and diffraction, including the Comtech; and solid-state, RF microwave high-power amplifiers and control components designed for radar, electronic warfare, data link, medical and aviation applications, as well as engages in the procurement and supply chain management of electrical, electronic, and electromechanical parts for satellite, launch vehicle, and manned space applications. Its Terrestrial and Wireless Networks segment offers next generation 911 solutions, which includes emergency call routing, location validation, policy-based routing rules, logging, and security functionality; emergency services IP network transport infrastructure for emergency services communications and support; call handling applications for public safety answering points; wireless emergency alerts solutions for network operators; and software and equipment for location-based and text messaging services for various applications including for public safety, commercial, and government services. The company was founded in 1967 and is headquartered in Melville, New York.