CalAmp (NASDAQ: CAMP) and Telephone & Data Systems (NYSE:TDS) are both telecommunications services companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

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This is a breakdown of recent ratings and recommmendations for CalAmp and Telephone & Data Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CalAmp 0 2 7 0 2.78
Telephone & Data Systems 0 0 1 0 3.00

CalAmp presently has a consensus target price of $26.25, indicating a potential upside of 9.24%. Given CalAmp’s higher possible upside, analysts clearly believe CalAmp is more favorable than Telephone & Data Systems.

Dividends

Telephone & Data Systems pays an annual dividend of $0.62 per share and has a dividend yield of 2.1%. CalAmp does not pay a dividend. Telephone & Data Systems pays out 47.0% of its earnings in the form of a dividend. Telephone & Data Systems has raised its dividend for 43 consecutive years.

Valuation & Earnings

This table compares CalAmp and Telephone & Data Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CalAmp $351.10 million 2.44 -$7.90 million $0.47 51.13
Telephone & Data Systems $5.04 billion 0.64 $153.00 million $1.32 21.92

Telephone & Data Systems has higher revenue and earnings than CalAmp. Telephone & Data Systems is trading at a lower price-to-earnings ratio than CalAmp, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

CalAmp has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500. Comparatively, Telephone & Data Systems has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Profitability

This table compares CalAmp and Telephone & Data Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CalAmp 5.00% 19.20% 7.92%
Telephone & Data Systems 3.03% 1.30% 0.67%

Insider and Institutional Ownership

71.3% of CalAmp shares are held by institutional investors. Comparatively, 80.5% of Telephone & Data Systems shares are held by institutional investors. 5.3% of CalAmp shares are held by company insiders. Comparatively, 17.3% of Telephone & Data Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

CalAmp beats Telephone & Data Systems on 9 of the 17 factors compared between the two stocks.

CalAmp Company Profile

CalAmp Corp. (CalAmp) is a provider of wireless communications solutions for a range of applications to customers globally. The Company operates through two business segments: Wireless DataCom and Satellite. The Company’s Wireless DataCom segment offers solutions for mobile resource management (MRM) applications, the machine-to-machine (M2M) communications space and other markets that require connectivity anytime and anywhere. The Company’s MRM and M2M solutions collect, monitor and report data and intelligence from remote and mobile assets. The Company delivers products, software services and solutions for energy, government, transportation and automotive vertical markets. The Company’s Satellite segment develops, manufactures and sells direct-broadcast satellite (DBS) outdoor customer premise equipment and whole home video networking devices enabling the delivery of digital and high definition satellite television services. Its satellite products are sold primarily to EchoStar.

Telephone & Data Systems Company Profile

Telephone and Data Systems, Inc. is a diversified telecommunications company. The Company is engaged in conducting its Wireless operations through its subsidiary, United States Cellular Corporation (U.S. Cellular), as well as providing its wireline services, cable services, and hosted and managed services (HMS), through its subsidiary, TDS Telecommunications Corporation (TDS Telecom). It operates through four business segments: U.S. Cellular, Wireline, Cable, and Hosted and Managed Services. U.S. Cellular provides service to postpaid and prepaid customers. Wireline operations provide retail telecommunications services to both residential and commercial customers. Wireline offers services, including broadband, video, voice and network access services. Cable offers broadband, video and voice services under TDS and BendBroadband brand names. It provides a range of information technology (IT) services, including colocation, and cloud and hosting solutions through its HMS business.

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