Silicom (NASDAQ:SILC) versus Comtech Telecommunications (NASDAQ:CMTL) Head-To-Head Review

Comtech Telecommunications (NASDAQ:CMTL) and Silicom (NASDAQ:SILC) are both small-cap technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.

Earnings and Valuation

This table compares Comtech Telecommunications and Silicom”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comtech Telecommunications	$499.53 million	0.09	-$155.30 million	($2.21)	-0.66
Silicom	$61.93 million	4.60	-$11.48 million	($1.71)	-28.99

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

Volatility & Risk

Comtech Telecommunications has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500. Comparatively, Silicom has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500.

Insider & Institutional Ownership

52.8% of Silicom shares are owned by institutional investors. 2.2% of Comtech Telecommunications shares are owned by insiders. Comparatively, 25.4% of Silicom shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Comtech Telecommunications and Silicom, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comtech Telecommunications	1	1	1	0	2.00
Silicom	1	0	1	0	2.00

Comtech Telecommunications currently has a consensus price target of $2.50, indicating a potential upside of 71.23%. Silicom has a consensus price target of $60.00, indicating a potential upside of 21.02%. Given Comtech Telecommunications’ higher probable upside, research analysts clearly believe Comtech Telecommunications is more favorable than Silicom.

Profitability

This table compares Comtech Telecommunications and Silicom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Comtech Telecommunications	-5.52%	9.77%	1.05%
Silicom	-12.98%	-8.37%	-6.26%

About Comtech Telecommunications

Comtech Telecommunications Corp., together with its subsidiaries, engages in the provision of next-gen telecommunication solutions in the United States and internationally. The company’s Satellite and Space Communications segment offers satellite ground station technologies, services and system integration that facilitates the transmission of voice, video, and data over GEO, MEO and LEO satellite constellations, including solid-state and traveling wave tube power amplifiers, modems, VSAT platforms, and frequency converters; and satellite communications and tracking antenna systems, including high precision full motion fixed and mobile X/Y tracking antennas, RF feeds, reflectors, and radomes. This segment also provides over-the-horizon microwave troposcatter equipment that can transmit digitized voice, video, and data over distances up to 200 miles using the troposphere and diffraction, including the Comtech; and solid-state, RF microwave high-power amplifiers and control components designed for radar, electronic warfare, data link, medical and aviation applications, as well as engages in the procurement and supply chain management of electrical, electronic, and electromechanical parts for satellite, launch vehicle, and manned space applications. Its Terrestrial and Wireless Networks segment offers next generation 911 solutions, which includes emergency call routing, location validation, policy-based routing rules, logging, and security functionality; emergency services IP network transport infrastructure for emergency services communications and support; call handling applications for public safety answering points; wireless emergency alerts solutions for network operators; and software and equipment for location-based and text messaging services for various applications including for public safety, commercial, and government services. The company was founded in 1967 and is headquartered in Melville, New York.

About Silicom

Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for servers, server-based systems, and communications devices. It offers server network interface cards; and smart cards, such as smart server adapters, which include redirector and switching cards, encryption and data compression hardware acceleration cards, forward error correction acceleration and offloading cards, time synchronization cards, and field programmable gate array-based cards. The company also provides virtualized and universal customer-premises equipment; and edge devices for SD-WAN, secure access service edge, Telco dedicated routers, and NFV deployments. It serves original equipment manufacturing, cloud, telco, mobile, and related service provider markets. The company operates in the United States, North America, Israel, Europe, and the Asia Pacific. Silicom Ltd. was incorporated in 1987 and is headquartered in Kfar Saba, Israel.