Critical Review: Telit Communications (OTCMKTS:TTCNF) versus Digi International (NASDAQ:DGII)

Digi International (NASDAQ:DGII) and Telit Communications (OTCMKTS:TTCNF) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Earnings and Valuation

This table compares Digi International and Telit Communications”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	6.38	$40.80 million	$1.13	64.38
Telit Communications	N/A	N/A	N/A	N/A	N/A

Digi International has higher revenue and earnings than Telit Communications.

Analyst Recommendations

This is a summary of current ratings and price targets for Digi International and Telit Communications, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digi International	0	3	4	0	2.57
Telit Communications	0	0	0	0	0.00

Digi International presently has a consensus price target of $66.20, indicating a potential downside of 9.00%. Given Digi International’s stronger consensus rating and higher possible upside, research analysts clearly believe Digi International is more favorable than Telit Communications.

Profitability

This table compares Digi International and Telit Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Digi International	9.10%	11.28%	8.10%
Telit Communications	N/A	N/A	N/A

Institutional & Insider Ownership

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

Summary

Digi International beats Telit Communications on 9 of the 9 factors compared between the two stocks.

About Digi International

Digi International Inc. provides business and mission-critical Internet of Things (IoT) products, services, and solutions in the United States, Europe, the Middle East, Africa, and internationally. The company operates in two segments, IoT Products & Services, and IoT Solutions. It offers cellular routers for mission-critical wireless connectivity; cellular modules to embed cellular communications abilities into the products to deploy and manage intelligent and secure cellular connected products; console servers to provide secure and remote access to network equipment in data centers and at edge locations; and radio frequency products, including embedded wireless modules, off-the-shelf gateways, modems, and adapters under the Digi XBee brand. The company provides embedded system products under the Digi Connect, ConnectCore, and Rabbit brands; and infrastructure management products, comprising of serial servers, which offers serial port-to-Ethernet integration of devices into wired Ethernet networks; and universal serial bus solutions. In addition, it offers Digi Remote Manager and Lighthouse, a recurring revenue cloud-based service that provides a secure environment for customers to manage their connected device deployment and network devices; SmartSense by Digi for monitoring wirelessly the temperature of food and other perishable or sensitive goods, monitor facilities or pharmacies by tracking the completion of operating tasks by employees, as well as quality control and incident management for food service, healthcare, and transportation/logistics industries; and Ventus which provides MNaaS solutions. Further, the company provides professional services, such as site planning, implementation management, application development, and customer training; data plan subscriptions; and enhanced technical support services, as well as Digi Wireless Design Services. Digi International Inc. was incorporated in 1985 and is headquartered in Hopkins, Minnesota.

About Telit Communications

Telit Communications Ltd. develops, markets and sells cellular, Global Navigation Satellite System. The firm’s products and services are sold directly and indirectly, through a network of distributors, solution providers, engineering/design firms, device manufacturers and system integrators. It operates through the following business segments: IoT Products and Cloud & Connectivity Services. The company was founded by Oozi Cats in 1986 and is headquartered in London, the United Kingdom.