XG Technology (XGTI) and Digi International (NASDAQ:DGII) Head-To-Head Survey

Digi International (NASDAQ: DGII) and XG Technology (NASDAQ:XGTI) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Insider and Institutional Ownership

78.3% of Digi International shares are held by institutional investors. Comparatively, 2.2% of XG Technology shares are held by institutional investors. 6.9% of Digi International shares are held by company insiders. Comparatively, 2.8% of XG Technology shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Digi International has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, XG Technology has a beta of -0.83, indicating that its share price is 183% less volatile than the S&P 500.

Profitability

This table compares Digi International and XG Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digi International 5.16% 3.27% 2.97%
XG Technology -18.20% -19.60% -11.48%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Digi International and XG Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digi International 0 1 3 0 2.75
XG Technology 0 0 2 0 3.00

Digi International presently has a consensus target price of $14.50, indicating a potential upside of 38.10%. XG Technology has a consensus target price of $3.75, indicating a potential upside of 150.00%. Given XG Technology’s stronger consensus rating and higher probable upside, analysts clearly believe XG Technology is more favorable than Digi International.

Valuation & Earnings

This table compares Digi International and XG Technology’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Digi International $186.98 million 1.49 $16.27 million $0.35 30.00
XG Technology $27.54 million 0.63 -$14.61 million N/A N/A

Digi International has higher revenue and earnings than XG Technology.

Summary

Digi International beats XG Technology on 10 of the 12 factors compared between the two stocks.

Digi International Company Profile

Digi International Inc. is a provider of mission and business-critical machine-to-machine (M2M) and Internet-of-Things (IoT) connectivity products and services. The Company creates connected products and deploys and manages critical communications infrastructures in a range of environments. It offers four categories of hardware products: cellular routers and gateways, radio frequency (RF), embedded and network products. The Company’s cellular product category includes its cellular routers and all gateways. The Company’s RF product category includes its XBee modules, as well as other RF Solutions. Its embedded product category includes Digi Connect and Rabbit embedded systems on module and single board computers. Its network product category includes console and serial servers and universal serial bus (USB) connected products. The Company’s service offerings include wireless design services, Digi Device Cloud (which includes Digi Remote Manager) and enterprise support services.

XG Technology Company Profile

xG Technology, Inc. develops a portfolio of intellectual property, which is embedded in its software algorithms that offer cognitive interference mitigation and spectrum access solutions for a range of applications using commercial off the shelf devices. The Company is a provider of wireless video solutions to broadcast, law enforcement and defense markets, and private mobile broadband networks for use in a range of environments. The Company markets its technology solutions across three business units: Integrated Microwave Technologies (IMT), Vislink Communication Systems and xMax. The Company offers a range of frequency-agnostic cognitive radio solutions. It focuses on various industries across the world, such as telecommunications, cable, defense and public safety, municipal governments, critical infrastructure and markets ranging from rural to urban areas and expeditionary deployments.

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