Contrasting Audience (ADNC) and Communications Systems (JCS)

Audience (NASDAQ: ADNC) and Communications Systems (NASDAQ:JCS) are both small-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Dividends

Communications Systems pays an annual dividend of $0.16 per share and has a dividend yield of 4.6%. Audience does not pay a dividend. Communications Systems pays out -11.9% of its earnings in the form of a dividend.

Profitability

This table compares Audience and Communications Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Audience -95.17% -78.59% -64.91%
Communications Systems -13.91% -20.94% -17.56%

Analyst Recommendations

This is a breakdown of recent ratings for Audience and Communications Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Audience 0 0 0 0 N/A
Communications Systems 0 0 1 0 3.00

Communications Systems has a consensus target price of $6.00, indicating a potential upside of 72.41%. Given Communications Systems’ higher probable upside, analysts plainly believe Communications Systems is more favorable than Audience.

Institutional and Insider Ownership

31.7% of Communications Systems shares are owned by institutional investors. 19.5% of Communications Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Audience has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Communications Systems has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Valuation and Earnings

This table compares Audience and Communications Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Audience N/A N/A N/A ($3.63) -1.35
Communications Systems $99.35 million 0.31 -$8.11 million ($1.34) -2.60

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

Summary

Communications Systems beats Audience on 12 of the 13 factors compared between the two stocks.

Audience Company Profile

Audience, Inc. is a provider of voice and audio solutions that improve voice quality and the user experience in mobile devices. The Company’s solutions include hardware-accelerated digital signal processors (DSPs) and audio codecs and associated algorithms for noise suppression in mobile devices. The Company’s platform consists of its purpose-built DSPs and audio codec analog and mixed signal circuits and algorithms for voice isolation and noise suppression. It also provides its AuViD graphical design tools to help original equipment manufacturers (OEMs) design in and tune its products. The Company offers custom voice and audio processors, some with integrated smart audio codecs for device platforms, including smartphones, feature phones and media tablets. These processors are accompanied by its integration tools and support. It offers voice and audio processors, such as eS305, eS325, eS70x, eS75x, eS804 and eS854.

Communications Systems Company Profile

Communications Systems, Inc. (CSI) operates directly and through its subsidiaries located in the United States, Costa Rica and the United Kingdom. The Company operates through three segments: Suttle, Transition Networks and JDL Technologies (JDL). The Company provides physical connectivity infrastructure products and services for global deployments of broadband networks. The Company is principally engaged through its subsidiary and business unit, Suttle, Inc., in the manufacture and sale of connectivity infrastructure products for broadband and voice communications, and through its another subsidiary and business unit, Transition Networks, Inc., in the manufacture and sale of core media conversion products for broadband networks. Through its JDL Technologies, Inc. subsidiary and business unit, CSI provides information technology (IT) solutions, including network design, computer infrastructure installations, IT service management, network security and network operation services.

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