Communications Systems (NASDAQ:JCS) and Zoom Technologies (OTCMKTS:ZOOM) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Dividends

Communications Systems pays an annual dividend of $0.16 per share and has a dividend yield of 6.5%. Zoom Technologies does not pay a dividend. Communications Systems pays out -106.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings for Communications Systems and Zoom Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Communications Systems 1 0 0 0 1.00
Zoom Technologies 0 0 0 0 N/A

Earnings & Valuation

This table compares Communications Systems and Zoom Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Communications Systems $82.32 million 0.27 -$11.82 million ($0.15) -16.47
Zoom Technologies N/A N/A N/A N/A N/A

Zoom Technologies has lower revenue, but higher earnings than Communications Systems.

Insider and Institutional Ownership

29.2% of Communications Systems shares are owned by institutional investors. 21.5% of Communications Systems shares are owned by insiders. Comparatively, 17.7% of Zoom Technologies shares are owned by 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.

Volatility and Risk

Communications Systems has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Zoom Technologies has a beta of 105.18, suggesting that its stock price is 10,418% more volatile than the S&P 500.

Profitability

This table compares Communications Systems and Zoom Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Communications Systems -11.71% -16.87% -13.89%
Zoom Technologies N/A N/A N/A

Summary

Communications Systems beats Zoom Technologies on 5 of the 9 factors compared between the two stocks.

About Communications Systems

Communications Systems, Inc., through its subsidiaries, manufactures and sells connectivity infrastructure products for broadband and voice communications in North America, Europe, the Middle East, Africa, and internationally. The company's Suttle segment provides enclosure systems to support premise distribution of broadband and other connectivity networks; fiber optic management and connectivity solutions for access and premise networks; and modular connecting products for copper telecommunications networks, as well as DSL products that support broadband connectivity to copper networks under the Suttle brand name. This segment serves telephone companies, electrical/low-voltage contractors, home builders, cable customers, and original equipment manufacturers (OEMs) directly, as well as through distributors. Its Transition Networks segment designs, assembles, and markets media converters, NIDs, network interface cards, Ethernet switches, small form factor pluggable modules, and other connectivity products under the Transition Networks brand name. This segment sells its products through distributors, resellers, integrators, and OEMs to the federal government, enterprise, service provider, industrial, security, and surveillance markets. The company's JDL Technologies segment offers IT managed services; network design, deployment, and integration; cloud, hosted, and virtualization services; and remote support and management services. This segment serves education, healthcare, and commercial markets. Its Net2Edge segment designs, manufactures, and markets carrier Ethernet based network access devices and software under the Liberator brand name. This segment serves government, enterprise, utility, industrial, and surveillance markets, as well as service providers through direct touch sales model, and approved partners and integrators. Communications Systems, Inc. was founded in 1969 and is headquartered in Minnetonka, Minnesota.

About Zoom Technologies

Zoom Technologies, Inc. does not have significant operations. Previously, it distributed wireless communication products in the United States. The company is headquartered in Beijing, China.

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