Comparing 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 superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations 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	2	1	1	2.75

Digi International currently has a consensus target price of $82.40, indicating a potential upside of 30.36%. Gilat Satellite Networks has a consensus target price of $20.00, indicating a potential upside of 178.16%. Given Gilat Satellite Networks’ stronger consensus rating and higher probable upside, analysts clearly believe Gilat Satellite Networks is more favorable than Digi International.

Risk & Volatility

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

Insider & Institutional 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 large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

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 revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digi International	$430.22 million	5.58	$40.80 million	$1.26	50.17
Gilat Satellite Networks	$451.66 million	1.18	$20.72 million	$0.44	16.34

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.

Summary

Digi International beats Gilat Satellite Networks on 10 of the 15 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 Gilat Satellite Networks

Gilat Satellite Networks Ltd., together with its subsidiaries, provides satellite-based broadband communication solutions in Israel, the United States, Peru, and internationally. It operates in three segments: Satellite Networks, Integrated Solutions, and Network Infrastructure and Services. Its portfolio consists of cloud-based satellite network platform, very small aperture terminals, amplifiers, modems, on-the-move antennas, solid state power amplifiers, block upconverters, transceivers, and defense ground systems and field services. The company also develops, manufactures, and supplies products and solutions for mission-critical defense and broadcast satellite communications systems, advanced on-the-move and on-the-pause satellite communications equipment, systems, and solutions, including airborne, ground-mobile satellite systems and solutions; and provides terrestrial, including fiber optic and wireless network, and satellite network construction and operation services. In addition, it provides turnkey integrated solutions, including managed satellite network services, network planning and optimization, remote network operation, call center support, hub and field operations, and communication networks construction and installation services; connectivity services, internet access, and telephony services to enterprise, government, and residential customers; and builds telecommunication infrastructure using fiber-optic and wireless technologies for broadband connectivity. The company sells its products and solutions to communication service providers, satellite operators, Mobile Network Operators, and system integrators that use satellite communications to serve enterprise, social inclusion solutions, government and residential users, and defense and homeland security organizations, as well as directly to end-users. Gilat Satellite Networks Ltd. was incorporated in 1987 and is headquartered in Petah Tikva, Israel.