Critical Comparison: HMS Networks AB (publ) (OTCMKTS:HMNKF) versus Digi International (NASDAQ:DGII)

Digi International (NASDAQ:DGII) and HMS Networks AB (publ) (OTCMKTS:HMNKF) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

95.9% of Digi International shares are owned by institutional investors. 4.1% of Digi International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Digi International and HMS Networks AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Digi International	3.94%	11.32%	7.51%
HMS Networks AB (publ)	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent recommendations and price targets for Digi International and HMS Networks AB (publ), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digi International	0	1	4	0	2.80
HMS Networks AB (publ)	0	0	0	0	N/A

Digi International presently has a consensus price target of $34.20, indicating a potential upside of 25.46%. Given Digi International’s higher probable upside, equities analysts plainly believe Digi International is more favorable than HMS Networks AB (publ).

Valuation & Earnings

This table compares Digi International and HMS Networks AB (publ)”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digi International	$431.16 million	2.30	$24.77 million	$0.38	71.74
HMS Networks AB (publ)	N/A	N/A	N/A	$5.61	7.28

Digi International has higher revenue and earnings than HMS Networks AB (publ). HMS Networks AB (publ) 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 HMS Networks AB (publ) on 9 of the 10 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 HMS Networks AB (publ)

HMS Networks AB (publ) engages in the provision of products that enable industrial equipment to communicate and share information worldwide. The company offers Anybus Embedded that offers multi-network connectivity with a single development project; Anybus Gateways, a gateway for connecting devices, machines, systems, or networks; Anybus Wireless that allows to connect machines and devices over Bluetooth, Wi-Fi, cellular networks, and industrial Ethernet; and Anybus Diagnostics, which offers tools and services to monitor, analyze, and troubleshoot industrial networks. It also provides Ewon Cosy, an industrial VPN device for secure remote access; Ewon Flexy, an industrial device and IIoT gateways for flexible remote access and data services; Ewon Flexy Extension Cards, which allow to keep up with the evolution of communication technologies while protecting investment in the device; and Ewon Talk2M, an industrial cloud that enables its customers to access their assets; Ewon Netbiter, a gateway to remote connectivity for energy generation systems; and Argos, a IIoT cloud dashboard, as well as offers other IIoT softwares. In addition, the company offers Intesis protocol translators, air conditioner interfaces, AC Cloud control, and ST cloud control solutions; and PC interfaces, repeaters, bridges, routers, gateways, and safety solutions under the Ixxat brand. Further, it provides Owasys, a wireless communication platforms, as well as offers brand labeling, system, software, and maintenance solutions. The company offers its solutions to device manufactures, machine builders, system integrators, and end users. HMS Networks AB (publ) was founded in 1988 and is headquartered in Halmstad, Sweden.