Financial Review: Digital Ally (DGLY) vs. Comtech Telecomm. (CMTL)

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Comtech Telecomm. (NASDAQ: DGLY) and Digital Ally (NASDAQ:DGLY) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Comtech Telecomm. and Digital Ally, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comtech Telecomm. 0 2 4 0 2.67
Digital Ally 0 1 1 0 2.50

Comtech Telecomm. presently has a consensus price target of $33.20, indicating a potential downside of 6.95%. Digital Ally has a consensus price target of $4.50, indicating a potential upside of 69.81%. Given Digital Ally’s higher probable upside, analysts plainly believe Digital Ally is more favorable than Comtech Telecomm..

Institutional and Insider Ownership

88.5% of Comtech Telecomm. shares are owned by institutional investors. Comparatively, 4.1% of Digital Ally shares are owned by institutional investors. 7.0% of Comtech Telecomm. shares are owned by company insiders. Comparatively, 19.8% of Digital Ally shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Comtech Telecomm. has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, Digital Ally has a beta of 2.66, indicating that its share price is 166% more volatile than the S&P 500.

Valuation and Earnings

This table compares Comtech Telecomm. and Digital Ally’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Comtech Telecomm. $550.37 million 1.53 $15.82 million $0.34 104.94
Digital Ally $12.77 million 1.48 -$12.25 million ($1.50) -1.77

Comtech Telecomm. has higher revenue and earnings than Digital Ally. Digital Ally is trading at a lower price-to-earnings ratio than Comtech Telecomm., indicating that it is currently the more affordable of the two stocks.

Dividends

Comtech Telecomm. pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Digital Ally does not pay a dividend. Comtech Telecomm. pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Comtech Telecomm. and Digital Ally’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comtech Telecomm. 5.38% 3.21% 1.89%
Digital Ally -108.35% -531.26% -75.46%

Summary

Comtech Telecomm. beats Digital Ally on 12 of the 16 factors compared between the two stocks.

Comtech Telecomm. Company Profile

Comtech Telecommunications Corp. designs, develops, produces, and markets products, systems, and services for communications solutions. The company's Commercial Solutions segment provides ground-based equipment, such as single channel per carrier modems and solid state amplifiers that facilitate the transmission of voice, video, and data, as well as offers traveling wave tube amplifiers comprising high power narrow-band amplifiers that are used to amplify signals from satellite earth stations; and safety and security technology solutions that enable 911 c. This segment also offers enterprise application technologies, including location-based technology, such as Trusted Location, a software-based scoring system that allows providers to determine mobile location and identify fraudulent behavior and other security risks; Look4, an application that enables customers to build their own applications; Indoor Location, a solution that enables the determination of a cell phone user's geospatial position; text messaging platforms that are used by wireless carriers to provide short-messaging services and to communicate with 911 public safety answering points; and VirtuMedix, a digital health platform that enables virtual healthcare. The company's Government Solutions segment provides command and control technologies, including tactical communications, managed networks, logistics, and end-to-end integration; cyber security training and computer network operations; and satellite-based mobile communications and tracking systems. This segment also offers over-the-horizon microwave systems, such as equipment and systems that transmit digitized voice, video, and data; and solid state high power broadband amplifiers designed for radar, electronic warfare, jamming, medical, and aviation applications. The company serves commercial and government customers worldwide. Comtech Telecommunications Corp. was founded in 1967 and is headquartered in Melville, New York.

Digital Ally Company Profile

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.

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