Analyzing CSP (NASDAQ:CSPI) and NetScout Systems (NASDAQ:NTCT)

CSP (NASDAQ:CSPI) and NetScout Systems (NASDAQ:NTCT) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Dividends

CSP pays an annual dividend of $0.60 per share and has a dividend yield of 4.3%. NetScout Systems does not pay a dividend. CSP has increased its dividend for 6 consecutive years.

Volatility & Risk

CSP has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, NetScout Systems has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Valuation & Earnings

This table compares CSP and NetScout Systems’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CSP $72.92 million 0.78 $14.44 million N/A N/A
NetScout Systems $909.92 million 2.21 -$73.32 million $0.81 32.04

CSP has higher earnings, but lower revenue than NetScout Systems.

Insider & Institutional Ownership

24.7% of CSP shares are owned by institutional investors. 10.1% of CSP shares are owned by insiders. Comparatively, 3.9% of NetScout Systems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares CSP and NetScout Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CSP 20.03% -5.48% -2.92%
NetScout Systems -8.06% 3.16% 1.98%

Analyst Recommendations

This is a summary of current recommendations for CSP and NetScout Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CSP 0 0 0 0 N/A
NetScout Systems 0 2 1 0 2.33

NetScout Systems has a consensus price target of $29.33, indicating a potential upside of 13.04%. Given NetScout Systems’ higher possible upside, analysts clearly believe NetScout Systems is more favorable than CSP.

Summary

NetScout Systems beats CSP on 7 of the 13 factors compared between the two stocks.

CSP Company Profile

CSP Inc. develops and markets IT integration solutions, security and managed services, purpose built network adapters, and cluster computer systems for commercial and defense customers worldwide. The company's High Performance Products segment offers computing systems for digital signal processing applications in the defense market; Ethernet adapters and solutions for various applications in the packet capture, financial transaction, and storage interconnect markets; ARC Series adapters for financial trading and network monitoring; and nVoy Series products comprising 100G Packet Broker and 10G Packet Recorder, and specialized software under the Myricom brand. Its Technology Solutions segment provides third-party computer hardware and software as a value added reseller to various customers in Web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as implementation, integration, migration, configuration, installation, and project management; storage and virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; and IT security compliance services. In addition, this segment provides unified communications, wireless, and routing and switching solutions; custom software applications and solutions development and support services; maintenance and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT, as well as IT security support tasks. Further, this segment offers managed and cloud services, such as proactive monitoring and remote management of IT Infrastructure, collaboration and resale, security, and backup and replication. CSP Inc. was founded in 1968 and is headquartered in Lowell, Massachusetts.

NetScout Systems Company Profile

NetScout Systems, Inc. provides real-time operational intelligence and performance analytics for digital business services against disruptions in availability, performance, and security in the United States, Europe, Asia, and internationally. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and Wi-Fi networks. It also provides Intelligent Data Sources under the InfiniStream brand name that provide real-time collection and analysis of data from the network; packet flow systems that deliver targeted network traffic access to an increasing number of monitoring and security systems; and a suite of test access points that enable non-disruptive access to network traffic with multiple link type and speed options. In addition, the company offers portable network analysis and troubleshooting tools, which help customers identify key issues that impact network and application performance. Further, it provides security solutions that enable service providers and enterprises to protect their networks against distributed denial of service attacks; and threat detection solutions that enable enterprises to identify and investigate advanced threat campaigns that present tangible risks to the integrity of their networks. The company serves enterprise customers in industries, such as financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile operators, wireline operators, cable operators, and cloud providers; and governmental agencies through a direct sales force, and indirect reseller and distribution channels. NetScout Systems, Inc. was founded in 1984 and is headquartered in Westford, Massachusetts.

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