Reviewing Technical Communications (TCCO) & Digital Ally (DGLY)

Digital Ally (NASDAQ:DGLY) and Technical Communications (NASDAQ:TCCO) are both small-cap industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Digital Ally and Technical Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Ally 0 1 1 0 2.50
Technical Communications 0 0 0 0 N/A

Digital Ally presently has a consensus target price of $4.50, indicating a potential upside of 60.14%. Given Digital Ally’s higher possible upside, equities research analysts plainly believe Digital Ally is more favorable than Technical Communications.

Risk and Volatility

Digital Ally has a beta of 3, meaning that its stock price is 200% more volatile than the S&P 500. Comparatively, Technical Communications has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.

Profitability

This table compares Digital Ally and Technical Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digital Ally -123.96% -3,415.79% -92.76%
Technical Communications -13.57% -19.08% -17.00%

Earnings and Valuation

This table compares Digital Ally and Technical Communications’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Ally $12.77 million 2.30 -$12.25 million ($1.50) -1.87
Technical Communications $4.21 million 1.57 -$1.42 million N/A N/A

Technical Communications has lower revenue, but higher earnings than Digital Ally.

Insider & Institutional Ownership

3.5% of Digital Ally shares are held by institutional investors. Comparatively, 1.2% of Technical Communications shares are held by institutional investors. 19.8% of Digital Ally shares are held by company insiders. Comparatively, 25.7% of Technical Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Digital Ally beats Technical Communications on 6 of the 11 factors compared between the two stocks.

About Digital Ally

Digital Ally, Inc. produces and sells digital video imaging and storage products for use in law enforcement, security, and commercial applications in the United States and internationally. Its digital audio/video recording, storage, and other products include an in-car digital audio/video recorder that is contained in a rear view mirror for law enforcement vehicles and commercial fleets; and hands-free automatic activated body-worn cameras and in-car video systems, as well as provides its law enforcement customers with audio/video surveillance from multiple vantage points. The company also provides VuLink, an in-car device that enables an in-car and body worn digital audio/video camera system to automatically and simultaneously start recording; and Digital Ally, a suite of data management Web-based tools to assist fleet managers in the organization, archival, and management of videos and telematics information. In addition, its digital audio/video recording, storage, and other products comprise a miniature body-worn digital video system; VuVault.net, a law enforcement cloud storage solution, including cloud-based fleet management and driver monitoring/training applications; and FleetVU Manager, a Web-based software for commercial fleet tracking and monitoring. The company sells its products through direct sales and third-party distributors. Digital Ally, Inc. is headquartered in Lenexa, Kansas.

About Technical Communications

Technical Communications Corporation designs, develops, manufactures, distributes, markets, and sells communications security devices, systems, and services worldwide. The company primarily provides voice, data, and fax, and voice networks. Its products include government systems, such as DSD 72A-SP military bulk encryptor, CSD 3324 SE telephone/fax encryptor, and the DSP 9000 radio encryption system, as well as the HSE 6000 squad radio headset and telephone encryptor for public safety special operations land mobile radio applications and for military applications. The company also provides secure office systems, such as CSD 4100 executive secure telephone and CipherTalk 8500 Internet protocol (IP)-based secure wireless phone. In addition, it offers network security systems comprising network encryption systems with KEYNET centralized key and device management for IP, SONET/SDH, and frame relay networks to secure data in transit from local area network to local area network and across wide area networks. The company's products are used to protect confidentiality in communications between radios, telephones, mobile phones, facsimile machines, and data network equipment over wires, fiber optic cables, radio waves, and microwave and satellite links. It serves various markets, including foreign and domestic governmental agencies, law enforcement and military agencies, telecommunications carriers, financial institutions, and multinational companies requiring protection of mission-critical information. The company sells directly to customers, original equipment manufacturers, and value-added resellers using its in-house sales force, as well as domestic and international representatives, consultants, and distributors. Technical Communications Corporation was founded in 1961 and is headquartered in Concord, Massachusetts.

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