Contrasting Ixia (XXIA) and Communications Systems (JCS)

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

Analyst Ratings

This is a summary of recent ratings for Ixia and Communications Systems, as provided by MarketBeat.com.

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

Communications Systems has a consensus price target of $6.00, indicating a potential upside of 80.18%. Given Communications Systems’ higher possible upside, analysts clearly believe Communications Systems is more favorable than Ixia.

Profitability

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

Net Margins Return on Equity Return on Assets
Ixia -29.28% -28.71% -19.71%
Communications Systems -13.91% -20.94% -17.56%

Dividends

Communications Systems pays an annual dividend of $0.16 per share and has a dividend yield of 4.8%. Ixia does not pay a dividend. Communications Systems pays out -11.9% of its earnings in the form of a dividend.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ixia N/A N/A N/A ($0.41) -47.93
Communications Systems $99.35 million 0.30 -$8.11 million ($1.34) -2.49

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

Institutional and Insider Ownership

63.6% of Ixia shares are owned by institutional investors. Comparatively, 31.6% of Communications Systems shares are owned by institutional investors. 24.4% of Ixia shares are owned by insiders. Comparatively, 19.5% of Communications Systems 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.

Summary

Communications Systems beats Ixia on 9 of the 12 factors compared between the two stocks.

Ixia Company Profile

Ixia is a provider of physical and virtual network application performance and security resilience solutions. The Company’s product solutions consist of its hardware platforms, software applications and services, including warranty and maintenance offerings. The Company helps its customers to validate the performance and security resilience of their applications and networks. The Company offers network test hardware platforms with interchangeable interfaces, using a common set of applications and Application Programing Interfaces (APIs). The Company provides its solutions to network equipment manufacturers (NEMs), service providers, and enterprise and government organizations. The Company’s product solutions consist of its hardware platforms, such as chassis, interface cards and appliances, software application tools, and services, including its warranty and maintenance offerings and professional services.

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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