Critical Contrast: Communications Systems (JCS) and The Competition

Communications Systems (NASDAQ: JCS) is one of 67 publicly-traded companies in the “Communications & Networking” industry, but how does it compare to its competitors? We will compare Communications Systems to related companies based on the strength of its risk, earnings, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Communications Systems and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Communications Systems $91.24 million -$1.87 million -4.65
Communications Systems Competitors $2.41 billion $618.33 million 27.28

Communications Systems’ competitors have higher revenue and earnings than Communications Systems. Communications Systems is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

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

Net Margins Return on Equity Return on Assets
Communications Systems -9.55% -14.44% -12.11%
Communications Systems Competitors -1.71% -6.54% 0.52%

Institutional and Insider Ownership

31.8% of Communications Systems shares are owned by institutional investors. Comparatively, 64.0% of shares of all “Communications & Networking” companies are owned by institutional investors. 17.5% of Communications Systems shares are owned by insiders. Comparatively, 12.5% of shares of all “Communications & Networking” companies are owned 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

Communications Systems pays an annual dividend of $0.16 per share and has a dividend yield of 3.5%. Communications Systems pays out -16.3% of its earnings in the form of a dividend. As a group, “Communications & Networking” companies pay a dividend yield of 1.9% and pay out 40.7% of their earnings in the form of a dividend. Communications Systems is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Volatility and Risk

Communications Systems has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Communications Systems’ competitors have a beta of 1.17, meaning that their average stock price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Communications Systems and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Communications Systems 0 0 1 0 3.00
Communications Systems Competitors 362 2389 3911 152 2.57

Communications Systems presently has a consensus target price of $6.00, suggesting a potential upside of 31.58%. As a group, “Communications & Networking” companies have a potential upside of 21.89%. Given Communications Systems’ stronger consensus rating and higher possible upside, analysts plainly believe Communications Systems is more favorable than its competitors.

Summary

Communications Systems competitors beat Communications Systems on 8 of the 14 factors compared.

About Communications Systems

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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