Brocade Communications Systems (NASDAQ: BRCD) and Sierra Wireless (NASDAQ:SWIR) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.
This table compares Brocade Communications Systems and Sierra Wireless’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Brocade Communications Systems||-3.56%||-3.07%||-1.62%|
Brocade Communications Systems pays an annual dividend of $0.22 per share and has a dividend yield of 1.7%. Sierra Wireless does not pay a dividend. Brocade Communications Systems pays out 314.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider and Institutional Ownership
83.7% of Brocade Communications Systems shares are owned by institutional investors. Comparatively, 21.0% of Sierra Wireless shares are owned by institutional investors. 1.8% of Brocade Communications Systems shares are owned by company insiders. Comparatively, 2.0% of Sierra Wireless shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Brocade Communications Systems and Sierra Wireless’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Brocade Communications Systems||$2.35 billion||2.25||$213.81 million||$0.07||181.86|
|Sierra Wireless||$615.61 million||1.19||$15.38 million||$0.72||28.40|
Brocade Communications Systems has higher revenue and earnings than Sierra Wireless. Sierra Wireless is trading at a lower price-to-earnings ratio than Brocade Communications Systems, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Brocade Communications Systems has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 3.17, meaning that its stock price is 217% more volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Brocade Communications Systems and Sierra Wireless, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Brocade Communications Systems||1||3||0||0||1.75|
Brocade Communications Systems presently has a consensus target price of $12.83, suggesting a potential upside of 0.81%. Sierra Wireless has a consensus target price of $26.30, suggesting a potential upside of 28.61%. Given Sierra Wireless’ stronger consensus rating and higher probable upside, analysts plainly believe Sierra Wireless is more favorable than Brocade Communications Systems.
Sierra Wireless beats Brocade Communications Systems on 10 of the 16 factors compared between the two stocks.
Brocade Communications Systems Company Profile
Brocade Communications Systems, Inc. (Brocade) is a supplier of networking hardware, software and services, including storage area networking (SAN) solutions and Internet protocol (IP) networking solutions for businesses and organizations of various types and sizes. The Company operates through three segments: SAN Products, IP Networking Products and Global Services. The SAN Products segment includes infrastructure products and solutions that help customers develop and deploy storage and server consolidation, disaster recovery and data security. The IP Networking Products segment includes Layer 2 and Layer 3 Ethernet switches, and routers to connect users over private and public networks. The Global Services segment includes break or fix maintenance, installation, consulting, network management and software maintenance, and post-contract customer support. Its products enable customers to deploy architectures and technologies, including virtualization and cloud computing.
Sierra Wireless Company Profile
Sierra Wireless, Inc. is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s OEM Solution segment offers cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. The Company’s Enterprise Solution segment offers intelligent routers and gateways, including management tools and applications that enable cellular connectivity. The Company’s Cloud and Connectivity Services segment offers a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments. The Company offers a portfolio of second generation, third generation, and fourth generation cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises.
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