Critical Analysis: Comtech Telecommunications Corp. (CMTL) and Lumentum Holdings (LITE)
Comtech Telecommunications Corp. (NASDAQ: CMTL) and Lumentum Holdings (NASDAQ:LITE) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.
This is a breakdown of current ratings and price targets for Comtech Telecommunications Corp. and Lumentum Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Comtech Telecommunications Corp.||0||2||3||0||2.60|
Comtech Telecommunications Corp. presently has a consensus price target of $17.90, suggesting a potential downside of 6.87%. Lumentum Holdings has a consensus price target of $64.36, suggesting a potential upside of 13.50%. Given Lumentum Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Lumentum Holdings is more favorable than Comtech Telecommunications Corp..
This table compares Comtech Telecommunications Corp. and Lumentum Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Comtech Telecommunications Corp.||2.02%||0.81%||0.42%|
Earnings & Valuation
This table compares Comtech Telecommunications Corp. and Lumentum Holdings’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Comtech Telecommunications Corp.||$554.98 million||0.82||$56.17 million||$0.50||38.44|
|Lumentum Holdings||$1.00 billion||3.49||$144.13 million||($1.69)||-33.55|
Lumentum Holdings has higher revenue and earnings than Comtech Telecommunications Corp.. Lumentum Holdings is trading at a lower price-to-earnings ratio than Comtech Telecommunications Corp., indicating that it is currently the more affordable of the two stocks.
Comtech Telecommunications Corp. pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. Lumentum Holdings does not pay a dividend. Comtech Telecommunications Corp. pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Risk and Volatility
Comtech Telecommunications Corp. has a beta of 1.93, meaning that its share price is 93% more volatile than the S&P 500. Comparatively, Lumentum Holdings has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.
Insider & Institutional Ownership
82.5% of Comtech Telecommunications Corp. shares are held by institutional investors. Comparatively, 97.4% of Lumentum Holdings shares are held by institutional investors. 6.4% of Comtech Telecommunications Corp. shares are held by company insiders. Comparatively, 0.8% of Lumentum Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Lumentum Holdings beats Comtech Telecommunications Corp. on 11 of the 17 factors compared between the two stocks.
About Comtech Telecommunications Corp.
Comtech Telecommunications Corp. designs, develops, produces and markets products, systems and services for communications solutions. The Company operates through two segments: Commercial Solutions and Government Solutions. It offers communications solutions, including command and control technologies, safety and security technologies and enterprise technologies. Its Commercial Solutions segment provides satellite communications (such as satellite earth station modems and traveling wave tube amplifiers), public safety systems (such as next generation 911 technologies) and enterprise application technologies (such as messaging and trusted location-based technologies). The Government Solutions segment includes command and control technologies, troposcatter technologies, and radio frequency power and switching technologies. It serves system and network suppliers in the global satellite, defense, broadcast and aerospace industries, and the United States federal government, among others.
About Lumentum Holdings
Lumentum Holdings Inc. is a provider of optical and photonic products for a range of end market applications, including data communications (Datacom) and telecommunications (Telecom) networking and commercial lasers (commercial lasers) for manufacturing, inspection and life-science applications. The Company operates in two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The Company’s OpComms products include a range of components, modules and subsystems to support and maintain customers in its two primary markets: Telecom and Datacom. The Company’s Lasers products serve customers in markets and applications, such as manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining, such as drilling in printed circuit boards, wafer singulation and solar cell scribing. The Company’s customers include original equipment manufacturers (OEMs).
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