Head-To-Head Comparison: Inseego (INSG) & Communications Systems (JCS)

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Inseego and Communications Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inseego 0 1 1 0 2.50
Communications Systems 0 0 1 0 3.00

Inseego presently has a consensus target price of $1.88, indicating a potential upside of 20.97%. Communications Systems has a consensus target price of $6.00, indicating a potential upside of 66.20%. Given Communications Systems’ stronger consensus rating and higher probable upside, analysts clearly believe Communications Systems is more favorable than Inseego.

Institutional & Insider Ownership

12.1% of Inseego shares are held by institutional investors. Comparatively, 32.1% of Communications Systems shares are held by institutional investors. 4.1% of Inseego shares are held by company insiders. Comparatively, 17.5% of Communications Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Inseego has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Communications Systems has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inseego $243.55 million 0.37 -$60.57 million ($1.22) -1.27
Communications Systems $99.35 million 0.33 -$8.11 million ($1.34) -2.69

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

Dividends

Communications Systems pays an annual dividend of $0.16 per share and has a dividend yield of 4.4%. Inseego does not pay a dividend. Communications Systems pays out -11.9% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Inseego -30.71% N/A -24.17%
Communications Systems -13.91% -20.94% -17.56%

Summary

Communications Systems beats Inseego on 10 of the 15 factors compared between the two stocks.

Inseego Company Profile

Novatel Wireless, Inc. is a provider of intelligent wireless solutions for the mobile communications market. The Company’s range of products includes intelligent mobile hotspots, universal serial bus (USB) modems, embedded modules, integrated asset-management and mobile tracking machine-to-machine (M2M) devices, communications and applications software and cloud services. It operates in the wireless communications industry in two product categories: M2M Products and Solutions, and Mobile Computing Solutions. M2M Products and Solutions includes its M2M embedded modules, integrated M2M communications devices, Ctrack fleet management platform and its service delivery platforms, Crossroads, DMS, the N4A DM and N4A CMS that provide device management and service enablement. Mobile Computing Solutions includes its MiFi brand of intelligent mobile hotspot devices, USB modems and embedded modules that enable Internet access and data transmission and services via cellular wireless networks.

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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