Comtech Telecommunications (NASDAQ:CMTL) and Motorola Solutions (NYSE:MSI) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.
Risk and Volatility
Comtech Telecommunications has a beta of 1.95, indicating that its share price is 95% more volatile than the S&P 500. Comparatively, Motorola Solutions has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.
Insider and Institutional Ownership
78.8% of Comtech Telecommunications shares are held by institutional investors. Comparatively, 86.6% of Motorola Solutions shares are held by institutional investors. 5.8% of Comtech Telecommunications shares are held by company insiders. Comparatively, 2.3% of Motorola Solutions shares are held 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.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Comtech Telecommunications and Motorola Solutions, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Comtech Telecommunications | 0 | 1 | 3 | 0 | 2.75 |
Motorola Solutions | 0 | 2 | 12 | 0 | 2.86 |
Comtech Telecommunications currently has a consensus target price of $27.75, indicating a potential upside of 3.24%. Motorola Solutions has a consensus target price of $154.0833, indicating a potential downside of 12.19%. Given Comtech Telecommunications' higher probable upside, research analysts clearly believe Comtech Telecommunications is more favorable than Motorola Solutions.
Profitability
This table compares Comtech Telecommunications and Motorola Solutions' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Comtech Telecommunications | -14.65% | 3.43% | 1.93% |
Motorola Solutions | 10.39% | -158.99% | 11.97% |
Dividends
Comtech Telecommunications pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Motorola Solutions pays an annual dividend of $2.84 per share and has a dividend yield of 1.6%. Comtech Telecommunications pays out 51.9% of its earnings in the form of a dividend. Motorola Solutions pays out 38.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Comtech Telecommunications has increased its dividend for 1 consecutive years and Motorola Solutions has increased its dividend for 1 consecutive years. Motorola Solutions is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Comtech Telecommunications and Motorola Solutions' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Comtech Telecommunications | $616.72 million | 1.09 | $7.02 million | $0.77 | 34.91 |
Motorola Solutions | $7.89 billion | 3.76 | $868 million | $7.44 | 23.59 |
Motorola Solutions has higher revenue and earnings than Comtech Telecommunications. Motorola Solutions is trading at a lower price-to-earnings ratio than Comtech Telecommunications, indicating that it is currently the more affordable of the two stocks.
Summary
Motorola Solutions beats Comtech Telecommunications on 12 of the 16 factors compared between the two stocks.