Technical Communications (TCCO) & Comtech Telecomm. (CMTL) Critical Analysis

Technical Communications (NASDAQ:TCCO) and Comtech Telecomm. (NASDAQ:CMTL) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Technical Communications 2.00% 3.21% 2.86%
Comtech Telecomm. 5.72% 5.05% 3.00%

Risk & Volatility

Technical Communications has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Comtech Telecomm. has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Technical Communications and Comtech Telecomm., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Technical Communications 0 0 0 0 N/A
Comtech Telecomm. 0 2 3 0 2.60

Comtech Telecomm. has a consensus target price of $36.75, suggesting a potential upside of 43.27%. Given Comtech Telecomm.’s higher probable upside, analysts plainly believe Comtech Telecomm. is more favorable than Technical Communications.

Earnings and Valuation

This table compares Technical Communications and Comtech Telecomm.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Technical Communications $5.31 million 0.93 $100,000.00 N/A N/A
Comtech Telecomm. $570.59 million 1.07 $29.76 million $0.75 34.20

Comtech Telecomm. has higher revenue and earnings than Technical Communications.

Dividends

Comtech Telecomm. pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. Technical Communications does not pay a dividend. Comtech Telecomm. pays out 53.3% of its earnings in the form of a dividend.

Insider & Institutional Ownership

2.1% of Technical Communications shares are owned by institutional investors. Comparatively, 88.3% of Comtech Telecomm. shares are owned by institutional investors. 25.7% of Technical Communications shares are owned by company insiders. Comparatively, 7.3% 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 stock is poised for long-term growth.

Summary

Comtech Telecomm. beats Technical Communications on 10 of the 14 factors compared between the two stocks.

About Technical Communications

Technical Communications Corporation designs, develops, manufactures, distributes, markets, and sells communications security devices, systems, and services worldwide. The company primarily provides voice, data, and fax, and voice networks. Its products include government systems, such as DSD 72A-SP military bulk encryptor, CSD 3324 SE telephone/fax encryptor, and the DSP 9000 radio encryption system, as well as the HSE 6000 squad radio headset and telephone encryptor for public safety special operations land mobile radio applications and for military applications. The company also provides secure office systems, such as CSD 4100 executive secure telephone and CipherTalk 8500 Internet protocol (IP)-based secure wireless phone. In addition, it offers network security systems comprising network encryption systems with KEYNET centralized key and device management for IP, SONET/SDH, and frame relay networks to secure data in transit from local area network to local area network and across wide area networks. The company's products are used to protect confidentiality in communications between radios, telephones, mobile phones, facsimile machines, and data network equipment over wires, fiber optic cables, radio waves, and microwave and satellite links. It serves various markets, including foreign and domestic governmental agencies, law enforcement and military agencies, telecommunications carriers, financial institutions, and multinational companies requiring protection of mission-critical information. The company sells directly to customers, original equipment manufacturers, and value-added resellers using its in-house sales force, as well as domestic and international representatives, consultants, and distributors. Technical Communications Corporation was founded in 1961 and is headquartered in Concord, Massachusetts.

About Comtech Telecomm.

Comtech Telecommunications Corp. designs, develops, produces, and markets products, systems, and services for communications solutions. The company's Commercial Solutions segment offers ground-based equipment, including single channel per carrier modems and solid-state amplifiers that facilitate the transmission of voice, video, and data over satellite links; and traveling wave tube amplifiers, such as high power narrow-band amplifiers used to amplify signals from satellite earth stations, as well as safety and security technologies. It also provides enterprise application technologies comprising location-based technologies that include Trusted Location, a software-based scoring system that allows providers to determine mobile location, and identify fraudulent behavior and other security risks; Look4, an application that enable customers to build their own applications; Indoor Location, a solution that enables the determination of a cell phone user's geospatial position; and text messaging platforms that are used by wireless carriers to provide short-messaging services and communicate with 911 public safety answering points. The company's Government Solutions segment offers command and control technologies, which comprise tactical communications, managed networks, logistics, and end-to-end integration; cyber security training and computer network operations; and satellite-based mobile communications and tracking systems. It also provides over-the-horizon microwave systems, including equipment and systems that transmit digitized voice, video, and data; and solid state high power broadband amplifiers designed for radar, electronic warfare, jamming, medical, and aviation applications. The company serves commercial and government customers worldwide. Comtech Telecommunications Corp. was founded in 1967 and is headquartered in Melville, New York.

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