Critical Comparison: Gilat Satellite Networks (GILT) & Clearfield (CLFD)

Gilat Satellite Networks (NASDAQ: GILT) and Clearfield (NASDAQ:CLFD) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares Gilat Satellite Networks and Clearfield’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gilat Satellite Networks $279.55 million 1.59 -$5.34 million $0.15 54.20
Clearfield $73.95 million 2.29 $3.84 million $0.28 43.75

Clearfield has lower revenue, but higher earnings than Gilat Satellite Networks. Clearfield is trading at a lower price-to-earnings ratio than Gilat Satellite Networks, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Gilat Satellite Networks has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Clearfield has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Profitability

This table compares Gilat Satellite Networks and Clearfield’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gilat Satellite Networks 2.83% 7.58% 4.20%
Clearfield 5.20% 5.95% 5.50%

Analyst Recommendations

This is a summary of current recommendations and price targets for Gilat Satellite Networks and Clearfield, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gilat Satellite Networks 0 0 0 0 N/A
Clearfield 0 0 2 0 3.00

Clearfield has a consensus price target of $15.50, indicating a potential upside of 26.53%. Given Clearfield’s higher probable upside, analysts clearly believe Clearfield is more favorable than Gilat Satellite Networks.

Insider and Institutional Ownership

7.9% of Gilat Satellite Networks shares are owned by institutional investors. Comparatively, 29.0% of Clearfield shares are owned by institutional investors. 1.1% of Gilat Satellite Networks shares are owned by company insiders. Comparatively, 18.3% of Clearfield shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Clearfield beats Gilat Satellite Networks on 10 of the 13 factors compared between the two stocks.

About Gilat Satellite Networks

Gilat Satellite Networks Ltd. is a provider of satellite-based broadband communications. The Company operates through three segments: Commercial, Mobility and Services divisions. The Company designs and manufactures satellite ground segment and networking communications equipment, which it sells to its customers either as network components (modems, Block Up converters (BUCs), antennas) or as complete network solutions (which include hubs and related terminals and services) or turnkey projects. The equipment that the Company develops includes commercial Very Small Aperture Terminals (VSAT) systems, defense and homeland security satellite communications systems, solid-state power amplifiers (SSPAs), BUCs, low-profile antennas, on-the-Move/on-the-Pause terminals and modems. The Company’s equipment is used by satellite operators, service providers, telecommunications operators, system integrators, government and defense organizations, large corporations and enterprises.

About Clearfield

Clearfield, Inc. manufactures, markets and sells fiber management and enclosure platform that consolidates, distributes and protects fiber as it moves from the inside plant to the outside plant and all the way to the home, business and cell site. The Company’s products include Clearview Cassette, which is the building block of its product platform; Connectivity and Optical Components; FieldSmart, which is a series of panels, cabinets, wall boxes and other enclosures that house the Clearview components; FieldShield, which is a fiber delivery method for broadband deployment; CraftSmart, which is a line of optical protection field enclosures, and Cable Assemblies. Its products are sold across broadband service providers, including traditional telephone companies, competitive local exchange carriers, multiple service operators (cable television), wireless service providers, and municipal-owned utilities that utilize fiber in their service offerings to businesses and consumers.

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