Critical Contrast: Gilat Satellite Networks (NASDAQ:GILT) and Digi International (NASDAQ:DGII)

Digi International (NASDAQ:DGII) and Gilat Satellite Networks (NASDAQ:GILT) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Digi International and Gilat Satellite Networks, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digi International	0	2	5	0	2.71
Gilat Satellite Networks	0	3	1	1	2.60

Digi International presently has a consensus price target of $82.40, indicating a potential upside of 20.81%. Gilat Satellite Networks has a consensus price target of $11.00, indicating a potential upside of 81.07%. Given Gilat Satellite Networks’ higher probable upside, analysts plainly believe Gilat Satellite Networks is more favorable than Digi International.

Profitability

This table compares Digi International and Gilat Satellite Networks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Digi International	9.63%	12.16%	8.48%
Gilat Satellite Networks	6.21%	10.12%	6.79%

Valuation and Earnings

This table compares Digi International and Gilat Satellite Networks”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digi International	$430.22 million	6.02	$40.80 million	$1.26	54.13
Gilat Satellite Networks	$451.66 million	0.99	$20.72 million	$0.44	13.81

Digi International has higher earnings, but lower revenue than Gilat Satellite Networks. Gilat Satellite Networks is trading at a lower price-to-earnings ratio than Digi International, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Digi International has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Gilat Satellite Networks has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Institutional and Insider Ownership

95.9% of Digi International shares are owned by institutional investors. Comparatively, 35.7% of Gilat Satellite Networks shares are owned by institutional investors. 3.4% of Digi International shares are owned by company insiders. Comparatively, 1.1% of Gilat Satellite Networks shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Digi International beats Gilat Satellite Networks on 11 of the 15 factors compared between the two stocks.

About Digi International

Digi International provides products and services for connecting, managing and securing devices used in the Internet of Things (IoT). Its offerings include cellular routers and gateways, embedded modules, console servers and other networking equipment, along with software and services for device management and remote monitoring. The company serves businesses and organizations across industries such as transportation, energy, healthcare, industrial automation and retail. Its solutions support deployments ranging from connected equipment and infrastructure to remote access and network management, with customers in markets around the world.

About Gilat Satellite Networks

Gilat Satellite Networks is an Israel-based provider of satellite communications technology and services. Founded in 1987, the company develops equipment and network solutions that enable broadband connectivity in areas where terrestrial networks are limited or unavailable. Its offerings include very small aperture terminal (VSAT) equipment, satellite modems, hubs, gateways and network management systems. Gilat also provides satellite communications solutions for cellular backhaul, enterprise and rural broadband, in-flight and maritime connectivity, and government and defense applications.