Analyzing EMCORE (EMKR) and Comtech Telecomm. (CMTL)

EMCORE (NASDAQ: EMKR) and Comtech Telecomm. (NASDAQ:CMTL) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EMCORE $122.89 million 1.49 $8.23 million $0.31 21.77
Comtech Telecomm. $550.37 million 0.94 $15.82 million $0.71 30.96

Comtech Telecomm. has higher revenue and earnings than EMCORE. EMCORE 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 current recommendations and price targets for EMCORE and Comtech Telecomm., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMCORE 0 2 2 0 2.50
Comtech Telecomm. 0 2 3 0 2.60

EMCORE presently has a consensus price target of $9.13, suggesting a potential upside of 35.19%. Comtech Telecomm. has a consensus price target of $20.63, suggesting a potential downside of 6.16%. Given EMCORE’s higher possible upside, equities research analysts plainly believe EMCORE is more favorable than Comtech Telecomm..

Dividends

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

Profitability

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

Net Margins Return on Equity Return on Assets
EMCORE 6.70% 9.30% 7.74%
Comtech Telecomm. 3.11% 1.87% 1.04%

Volatility and Risk

EMCORE has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Comtech Telecomm. has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500.

Institutional & Insider Ownership

77.6% of EMCORE shares are owned by institutional investors. Comparatively, 85.9% of Comtech Telecomm. shares are owned by institutional investors. 0.8% of EMCORE shares are owned by company insiders. Comparatively, 7.0% of Comtech Telecomm. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Comtech Telecomm. beats EMCORE on 10 of the 16 factors compared between the two stocks.

About EMCORE

EMCORE Corporation is engaged in designing and manufacturing indium phosphide (InP) optical chips, components, subsystems and systems for the broadband and specialty fiber optics market. The Company focuses on linear fiber optic transmission technology. The Company operates through Fiber Optics segment. The Company provides optical components, and also end-to-end solutions for high-speed communications network infrastructures. The Company’s optical technologies are designed for cable television (CATV) and fiber-to-the-premise (FTTP) networks, telecommunications and data centers, satellite communications, aerospace and defense, wireless networks, and broadcast and professional audio/video systems. The Company’s fiber optics products enable information that is modulated on light signals to be transmitted, routed (switched) and received in communication systems and networks.

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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