Analyzing Data Storage (NASDAQ:DTST) and Telesat (NASDAQ:TSAT)

Telesat (NASDAQ:TSAT) and Data Storage (NASDAQ:DTST) are both small-cap communication services companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

11.6% of Data Storage shares are held by institutional investors. 40.6% of Telesat shares are held by insiders. Comparatively, 21.2% of Data Storage shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Telesat and Data Storage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telesat	3	2	2	0	1.86
Data Storage	1	1	0	0	1.50

Telesat presently has a consensus price target of $33.50, suggesting a potential downside of 28.94%. Given Telesat’s stronger consensus rating and higher probable upside, research analysts clearly believe Telesat is more favorable than Data Storage.

Profitability

This table compares Telesat and Data Storage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telesat	-102.62%	-15.53%	-3.95%
Data Storage	1,247.09%	-5.48%	-4.86%

Volatility and Risk

Telesat has a beta of 2.06, indicating that its share price is 106% more volatile than the S&P 500. Comparatively, Data Storage has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Earnings & Valuation

This table compares Telesat and Data Storage”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telesat	$299.12 million	2.34	-$111.19 million	($17.89)	-2.63
Data Storage	$1.38 million	5.14	$19.20 million	($0.76)	-3.99

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

Summary

Telesat beats Data Storage on 8 of the 14 factors compared between the two stocks.

About Telesat

Telesat Corporation, a satellite operator, provides mission-critical communications solutions to broadcast, enterprise, and consulting customers worldwide. The company’s satellite-based services allow direct-to-home (DTH) service providers to deliver television programming, audio, and information channels directly to customers’ homes; and enables broadcasters, cable networks, and DTH service providers to transmit television programming services. It offers value-added services that include satellite capacity, digital encoding of video channels, authorization, and uplinking and downlinking services; and occasional use services for the broadcast of video news, sports, and live event coverages. The company also provides satellite capacity and end-to-end services comprising space segment services and terrestrial facilities for enterprise connectivity, and internet and cellular backhaul; rural telephony to telecommunications carriers and network services integrators; and other satellite services. In addition, it offers direct-to-consumer broadband services; communications services for the oil and gas and mining industries; and broadband communication services to maritime and aeronautical markets comprising commercial airplanes and vessels. Further, the company operates satellite and hybrid satellite/terrestrial networks. Additionally, it provides satellite operator services; and consulting services related to space and earth segments, government studies, research and development, and satellite control services. The company offers its services primarily through a direct sales force. As of December 31, 2020, it operated a fleet of 15 in-orbit geostationary satellites and a Canadian payload on the ViaSat-1 satellite. The company was founded in 1969 and is headquartered in Ottawa, Canada. Telesat Corporation is a subsidiary of Loral Space & Communications Inc.

About Data Storage

Data Storage Corporation provides data management and cloud solutions in the United States and internationally. It offers a suite of multi-cloud IT solutions, including cyber security solutions, which comprise ezSecurity, a security solution for endpoint security, system assessments, and risk analysis, as well as IBM system protection, including Ransomware defense. The company also provides data protection and recovery solutions, such as ezVault for offsite data protection; ezRecovery for fast data recovery; ezAvailability for real-time data replication with minimal recovery objectives; and ezMirror for data mirroring at the storage level. In addition, it offers cloud hosted production systems comprising ezHost, which delivers managed cloud services; and voice and data solutions, including Nexxis, which specializes in voice over internet protocol, internet access, and data transport solutions, which comprise dedicated internet services, SD-WAN options, and a cloud-based PBX solution. The company offers its solutions and services to businesses in healthcare, banking and finance, distribution services, manufacturing, construction, education, and government industries. Data Storage Corporation was founded in 2001 and is headquartered in Melville, New York.