Analyzing NTT Docomo (DCM) and Comtech Telecomm. (CMTL)

NTT Docomo (NASDAQ: CMTL) and Comtech Telecomm. (NASDAQ:CMTL) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Dividends

NTT Docomo pays an annual dividend of $0.39 per share and has a dividend yield of 1.5%. Comtech Telecomm. pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. NTT Docomo pays out 24.1% of its earnings in the form of 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. NTT Docomo has raised its dividend for 2 consecutive years. NTT Docomo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

NTT Docomo has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500. Comparatively, Comtech Telecomm. has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Institutional & Insider Ownership

0.6% of NTT Docomo shares are owned by institutional investors. Comparatively, 86.9% of Comtech Telecomm. shares are owned by institutional investors. 7.0% of Comtech Telecomm. shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
NTT Docomo 15.25% 12.38% 9.34%
Comtech Telecomm. 5.38% 3.21% 1.89%

Valuation and Earnings

This table compares NTT Docomo and Comtech Telecomm.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NTT Docomo $42.41 billion 2.24 $6.07 billion $1.62 15.80
Comtech Telecomm. $550.37 million 1.41 $15.82 million $0.34 96.56

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for NTT Docomo and Comtech Telecomm., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NTT Docomo 1 2 0 0 1.67
Comtech Telecomm. 0 2 4 0 2.67

Comtech Telecomm. has a consensus target price of $33.20, indicating a potential upside of 1.13%. Given Comtech Telecomm.’s stronger consensus rating and higher possible upside, analysts plainly believe Comtech Telecomm. is more favorable than NTT Docomo.

Summary

NTT Docomo beats Comtech Telecomm. on 10 of the 17 factors compared between the two stocks.

NTT Docomo Company Profile

NTT DOCOMO, INC. (DOCOMO) is a mobile telecommunications carrier. The Company operates through three segments: telecommunications business, smart life business and other businesses. The telecommunications business segment includes mobile phone services (long-term evolution (LTE) (Xi) services and freedom of mobile multimedia access (FOMA) services), optical-fiber broadband service, satellite mobile communications services, international services and equipment sales related to these services. The smart life business segment includes video and music distribution, electronic books and other services offered through its dmarket portal, as well as finance/payment services, shopping services and various other services to support the Company’s customers’ daily lives. Its other businesses segment primarily includes Mobile Device Protection Service, as well as the development, sale and maintenance of information technology (IT) systems.

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.

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