Critical Comparison: NEC (NIPNF) & Digi International (DGII)

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

Earnings & Valuation

This table compares NEC and Digi International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NEC $25.69 billion 0.30 $412.83 million N/A N/A
Digi International $228.37 million 1.41 $1.30 million $0.05 234.80

NEC has higher revenue and earnings than Digi International.

Insider & Institutional Ownership

81.5% of Digi International shares are held by institutional investors. 6.8% of Digi International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares NEC and Digi International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NEC 1.26% 3.50% 1.33%
Digi International 0.57% 1.32% 1.18%

Analyst Ratings

This is a breakdown of recent recommendations for NEC and Digi International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NEC 0 0 0 0 N/A
Digi International 0 0 6 0 3.00

Digi International has a consensus price target of $16.92, indicating a potential upside of 44.09%. Given Digi International’s higher possible upside, analysts clearly believe Digi International is more favorable than NEC.

About NEC

NEC Corporation engages in the integration of information technology (IT) and network technologies worldwide. It operates in four segments: Public, Enterprise, Telecom Carrier, and System Platform. The company provides systems integration services, such as systems implementation and consulting; maintenance and support services; outsourcing/cloud services; and system equipment. It also provides network infrastructure products, including core network products, mobile phone base stations, submarine systems comprising submarine cable and ocean observation systems, optical transmission systems, routers/switches, and mobile backhaul products, as well as telecom operations and management solutions, and other services/solutions. In addition, the company provides hardware products, such as servers, mainframes, supercomputers, storage products, business PCs, tablet devices, POS, ATMs, control equipment, wireless LAN routers, displays, and projectors; and software products that consist of integrated operation management, application servers, and security and database software. Further, it offers enterprise network solutions that include IP telephony systems, WAN/wireless access equipment, and LAN products; data center infrastructure services; and safety products, which include biometric solutions comprising face recognition and fingerprint identification, surveillance products, Smart energy products, and lighting equipment. Additionally, the company engages in the provision of IT services for retail sector; and manufacturing co-creation program activities. It primarily serves governments, governmental agencies, local governments, public institutions, financial institutions, and other organizations, as well as telecom carriers. The company was formerly known as Nippon Electric Company, Limited and changed its name to NEC Corporation in April 1983. NEC Corporation was founded in 1899 and is headquartered in Tokyo, Japan.

About Digi International

Digi International Inc. provides Internet of Things connectivity products, services, and solutions in North America, Europe, the Middle East, Africa, Asia, and Latin America. The company operates in two segments, IoT Products & Services and IoT Solutions. It offers cellular routers that provide connectivity for devices over a cellular data network; cellular gateway products that enable devices or groups of devices to be networked in locations where there is no existing network or where access to a network is prohibited; radio frequency products that utilize a range of wireless protocols for PC-to-device or device-to-device connectivity; and Connect, Rabbit, and ARM-based embedded systems on module and single board computers for medical, transportation, and industrial device manufacturers. The company also provides console and serial servers, as well as universal serial bus (USB)-to-serial converters, USB over Internet protocol products, and multiport USB hubs. In addition, it offers cellular remote management products that provide cellular router technology and device management solutions; Digi Remote Manager, a centralized remote device management solution to meet service level commitments and stay compliant with payment card industry data security standards, as well as to monitor, diagnose, and fix remote devices; turn-key wireless networking product development, testing, and certification for wireless technology platforms and applications; and implementation planning, application development, on-site support, installation, and customer training services. Further, the company provides SmartSense by Digi, a system that enables customers in food service, transportation/logistics, and healthcare to monitor the temperature of food and other perishable goods; and to track the completion of operating tasks by employees, as well as to have visibility in the supply chain to product temperature. The company was founded in 1985 and is headquartered in Minnetonka, Minnesota.

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