UTStarcom (NASDAQ: UTSI) and Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.
This table compares UTStarcom and Telefonaktiebolaget LM Ericsson’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telefonaktiebolaget LM Ericsson||-8.60%||-5.67%||-2.57%|
27.0% of UTStarcom shares are held by institutional investors. Comparatively, 8.1% of Telefonaktiebolaget LM Ericsson shares are held by institutional investors. 2.7% of UTStarcom shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Telefonaktiebolaget LM Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 1.0%. UTStarcom does not pay a dividend. Telefonaktiebolaget LM Ericsson pays out -11.5% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares UTStarcom and Telefonaktiebolaget LM Ericsson’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Telefonaktiebolaget LM Ericsson||$26.02 billion||0.93||$200.60 million||($0.61)||-11.95|
Telefonaktiebolaget LM Ericsson has higher revenue and earnings than UTStarcom.
This is a breakdown of recent ratings and price targets for UTStarcom and Telefonaktiebolaget LM Ericsson, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telefonaktiebolaget LM Ericsson||2||7||4||0||2.15|
UTStarcom currently has a consensus price target of $5.00, suggesting a potential downside of 16.39%. Telefonaktiebolaget LM Ericsson has a consensus price target of $5.59, suggesting a potential downside of 23.32%. Given UTStarcom’s stronger consensus rating and higher probable upside, equities research analysts clearly believe UTStarcom is more favorable than Telefonaktiebolaget LM Ericsson.
UTStarcom beats Telefonaktiebolaget LM Ericsson on 9 of the 14 factors compared between the two stocks.
UTStarcom Holdings Corp. provides broadband products, solution and services. The Company delivers broadband transport and access (both wireless fidelity (Wi-Fi) and fixed line) products and solutions, optimized for mobile backhaul, metro aggregation, broadband access and Wi-Fi data offloading. Its segments include Equipment, which is focused on its equipment sales, including network infrastructure and application products, and Services, which is engaged in providing services and support of its equipment products and also the new operational support segment. The broadband product lines include family of packet transport network (PTN) products based on multi-protocol label switch transport profile (MPLS-TP) and carrier Ethernet (CE) technologies enhanced through in-house software-defined networking (SDN) platform to support the network evolution, and multi services access network (MSAN) platform. Wireless broadband access is represented by end-to-end Carrier Wi-Fi solution.
About Telefonaktiebolaget LM Ericsson
Telefonaktiebolaget LM Ericsson (Ericsson) provides infrastructure, services and software to the telecommunication industry and other sectors. The Company’s segments include Networks, IT & Cloud and Media. The Networks segment consists of two business units: Network Products and Network Services. The overall focus is on evolving and managing access networks, including the development of hardware and software for radio access and transport networks. The IT & Cloud business includes two business units: IT & Cloud Products and IT & Cloud Services. The focus in IT & Cloud is to help telecom operators and selected enterprises through the digital transformations ahead. It develops and delivers software-based solutions for television and media and combines a product portfolio that spans the television value chain, with systems integration and managed services. The portfolio includes compression, content publishing through set-top box or pure over-the-top, content delivery and analytics.
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