Head-To-Head Review: Commscope (COMM) versus TESSCO Technologies (TESS)

Commscope (NASDAQ: COMM) and TESSCO Technologies (NASDAQ:TESS) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Commscope and TESSCO Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Commscope 0 5 7 0 2.58
TESSCO Technologies 0 0 0 0 N/A

Commscope currently has a consensus target price of $40.78, suggesting a potential upside of 6.72%. Given Commscope’s higher possible upside, equities analysts clearly believe Commscope is more favorable than TESSCO Technologies.

Earnings and Valuation

This table compares Commscope and TESSCO Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Commscope $4.92 billion 1.48 $222.83 million $0.99 38.60
TESSCO Technologies $533.29 million 0.31 $1.44 million $0.34 58.82

Commscope has higher revenue and earnings than TESSCO Technologies. Commscope is trading at a lower price-to-earnings ratio than TESSCO Technologies, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

58.3% of TESSCO Technologies shares are held by institutional investors. 3.3% of Commscope shares are held by insiders. Comparatively, 26.9% of TESSCO Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Commscope and TESSCO Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Commscope 4.21% 29.11% 5.97%
TESSCO Technologies 0.51% 3.09% 1.80%

Risk and Volatility

Commscope has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, TESSCO Technologies has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Dividends

TESSCO Technologies pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. Commscope does not pay a dividend. TESSCO Technologies pays out 235.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Commscope beats TESSCO Technologies on 10 of the 15 factors compared between the two stocks.

About Commscope

CommScope Holding Company, Inc. (CommScope) is a provider of infrastructure solutions for the core, access and edge layers of communications networks. The Company operates through two segments: CommScope Connectivity Solutions (CCS) and CommScope Mobility Solutions (CMS). Its portfolio includes wireless and fiber optic solutions. The Company’s solutions are found in the venues and outdoor spaces, including in data centers and buildings of all shapes, sizes and complexities; at wireless cell sites; in telecom central offices and cable head ends; in fiber-to-the-X (FTTX) deployments, and in airports, trains and tunnels. As of December 31, 2016, it served customers in over 100 countries through a network of more than 30 manufacturing and distribution facilities located around the globe. Its customers include global telecommunication operators and enterprise customers, including Fortune 500 enterprises and multi-system operators (MSOs).

About TESSCO Technologies

TESSCO Technologies Incorporated architects and delivers the product and value chain solutions to organizations responsible for building, operating, maintaining and reselling cellular, mobile communications, wireless-fidelity (Wi-Fi), machine-to-machine, Internet of Things and wireless backhaul systems. The Company provides marketing and sales services, knowledge and supply chain management, product-solution delivery and control systems utilizing Internet and information technology. Its customers include a diversified mix of carrier and public network operators, tower owners, program managers, contractors and integrators, wireless Internet service providers, industrial and enterprise self-maintained users (including railroads, utilities, mining operators, oil and gas operators and technicians), governments, manufacturers, value-added resellers, tier 1, 2 and 3 retail carrier stores and their independent agents, dealers and consumers, as well as other local and national retailers.

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