Analyzing ZTE (OTCMKTS:ZTCOF) and Comtech Telecommunications (NASDAQ:CMTL)

Comtech Telecommunications (NASDAQ:CMTL) and ZTE (OTCMKTS:ZTCOF) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

5.3% of ZTE shares are owned by institutional investors. 2.2% of Comtech Telecommunications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Comtech Telecommunications and ZTE”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comtech Telecommunications	$499.53 million	0.10	-$155.30 million	($2.21)	-0.78
ZTE	N/A	N/A	N/A	$0.76	3.66

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Comtech Telecommunications	-5.52%	9.77%	1.05%
ZTE	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and recommmendations for Comtech Telecommunications and ZTE, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comtech Telecommunications	1	1	1	0	2.00
ZTE	0	0	0	0	0.00

Comtech Telecommunications currently has a consensus price target of $2.50, suggesting a potential upside of 44.51%. Given Comtech Telecommunications’ stronger consensus rating and higher probable upside, research analysts clearly believe Comtech Telecommunications is more favorable than ZTE.

Summary

Comtech Telecommunications beats ZTE on 7 of the 11 factors compared between the two stocks.

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.

About ZTE

ZTE Corporation engages in the provision of integrated communication information solutions in the People's Republic of China, rest of Asia, Africa, Europe, the United States, and Oceania. It operates through three segments: Carriers' Networks, Government and Corporate Business, and Consumer Business. The Carriers' Network segment provides wireless access, wireline access, bearer networks, core networks, server and storage, and other innovative technologies and product solutions. The Consumer Business segment is involved in the development, production and sale of home information terminal, smart phones, mobile internet terminals, and innovative fusion terminals, as well as provision of related software application and value-added services. The Government and Corporate Business segment focuses on providing informatization solutions for the government and corporations through the application of products, such as communications networks, Internet of Things, big data, and cloud computing. The company was founded in 1985 and is headquartered in Shenzhen, the People's Republic of China.