Comtech Telecommunications (CMTL) vs. Sierra Wireless (SWIR) Critical Comparison

Comtech Telecommunications (NASDAQ: CMTL) and Sierra Wireless (NASDAQ:SWIR) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Earnings & Valuation

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This table compares Comtech Telecommunications and Sierra Wireless’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Comtech Telecommunications $550.37 million 1.28 $15.82 million $0.34 87.38
Sierra Wireless $692.08 million 0.84 $4.13 million $0.58 27.93

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

Profitability

This table compares Comtech Telecommunications and Sierra Wireless’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comtech Telecommunications 4.87% 2.20% 1.26%
Sierra Wireless 0.60% 4.82% 3.19%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Comtech Telecommunications and Sierra Wireless, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comtech Telecommunications 0 3 2 0 2.40
Sierra Wireless 0 8 3 0 2.27

Comtech Telecommunications presently has a consensus target price of $22.88, suggesting a potential downside of 23.01%. Sierra Wireless has a consensus target price of $24.30, suggesting a potential upside of 50.00%. Given Sierra Wireless’ higher possible upside, analysts clearly believe Sierra Wireless is more favorable than Comtech Telecommunications.

Volatility and Risk

Comtech Telecommunications has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 2.77, indicating that its share price is 177% more volatile than the S&P 500.

Insider and Institutional Ownership

87.8% of Comtech Telecommunications shares are held by institutional investors. Comparatively, 25.7% of Sierra Wireless shares are held by institutional investors. 7.0% of Comtech Telecommunications shares are held by insiders. Comparatively, 2.0% of Sierra Wireless shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Comtech Telecommunications pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Sierra Wireless does not pay a dividend. Comtech Telecommunications pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

About Comtech Telecommunications

Comtech Telecommunications Corp. designs, develops, produces, and markets products, systems, and services for communications solutions. The company's Commercial Solutions segment provides ground-based equipment, such as single channel per carrier modems and solid state amplifiers that facilitate the transmission of voice, video, and data, as well as offers traveling wave tube amplifiers comprising high power narrow-band amplifiers that are used to amplify signals from satellite earth stations; and safety and security technology solutions that enable 911 c. This segment also offers enterprise application technologies, including location-based technology, such as Trusted Location, a software-based scoring system that allows providers to determine mobile location and identify fraudulent behavior and other security risks; Look4, an application that enables customers to build their own applications; Indoor Location, a solution that enables the determination of a cell phone user's geospatial position; text messaging platforms that are used by wireless carriers to provide short-messaging services and to communicate with 911 public safety answering points; and VirtuMedix, a digital health platform that enables virtual healthcare. The company's Government Solutions segment provides command and control technologies, including tactical communications, managed networks, logistics, and end-to-end integration; cyber security training and computer network operations; and satellite-based mobile communications and tracking systems. This segment also offers over-the-horizon microwave systems, such as equipment and systems that transmit digitized voice, video, and data; and solid state high power broadband amplifiers designed for radar, electronic warfare, jamming, medical, and aviation applications. The company serves commercial and government customers worldwide. Comtech Telecommunications Corp. was founded in 1967 and is headquartered in Melville, New York.

About Sierra Wireless

Sierra Wireless, Inc., together with its subsidiaries, engages in building the Internet of Things (IoT) with intelligent wireless solutions in North America, Europe, and the Asia Pacific. It operates in three segments: Original Equipment Manufacturer (OEM) Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The OEM Solutions segment offers embedded cellular modules, short range wireless modules, software, and tools to integrate wireless connectivity into various products and solutions for OEM customers, including the embedded wireless modules product portfolio; and Legato, an open source, Linux-based application framework. This segment provides its products and solutions to a range of industries, including automotive, transportation, enterprise networking, energy, sales and payment, mobile computing, security, industrial monitoring, field services, residential, healthcare, and other industries. It also offers professional services to OEM customers during their product development and launch process. The Enterprise Solutions segment provides a range of second, third, and fourth generation LTE intelligent cellular routers and gateways, as well as security and device management solutions, and professional services to public safety, transportation field service, energy, industrial, retail, and financial enterprises. The Cloud and Connectivity Services segment provides secure and scalable cloud based platform for deploying and managing IoT subscriptions, devices, data, and applications; connectivity services, which include smart SIM and core network platforms; and managed broadband cellular services. Sierra Wireless, Inc. sells its products directly, as well as through various indirect channels, such as OEMs, distributors, value added resellers, and hardware vendors, as well as SIM vendors and mobile network operators. The company was founded in 1993 and is headquartered in Richmond, Canada.

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