ADTRAN (NASDAQ:ADTN) and QUALCOMM (NASDAQ:QCOM) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.
Analyst Ratings
This is a summary of current recommendations and price targets for ADTRAN and QUALCOMM, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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ADTRAN | 0 | 0 | 3 | 0 | 3.00 |
QUALCOMM | 0 | 12 | 16 | 1 | 2.62 |
ADTRAN currently has a consensus target price of $21.3333, suggesting a potential upside of 24.10%. QUALCOMM has a consensus target price of $165.68, suggesting a potential upside of 24.60%. Given QUALCOMM's higher possible upside, analysts clearly believe QUALCOMM is more favorable than ADTRAN.
Earnings and Valuation
This table compares ADTRAN and QUALCOMM's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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ADTRAN | $530.06 million | 1.57 | $-52,980,000.00 | ($0.01) | -1,719.00 |
QUALCOMM | $23.53 billion | 6.42 | $5.20 billion | $3.34 | 39.81 |
QUALCOMM has higher revenue and earnings than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than QUALCOMM, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
ADTRAN has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, QUALCOMM has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.
Profitability
This table compares ADTRAN and QUALCOMM's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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ADTRAN | -3.33% | -0.30% | -0.21% |
QUALCOMM | 22.09% | 90.74% | 11.56% |
Institutional & Insider Ownership
88.3% of ADTRAN shares are owned by institutional investors. Comparatively, 74.8% of QUALCOMM shares are owned by institutional investors. 2.5% of ADTRAN shares are owned by insiders. Comparatively, 0.1% of QUALCOMM shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Dividends
ADTRAN pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. QUALCOMM pays an annual dividend of $2.60 per share and has a dividend yield of 2.0%. ADTRAN pays out -3,600.0% of its earnings in the form of a dividend. QUALCOMM pays out 77.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ADTRAN has increased its dividend for 1 consecutive years and QUALCOMM has increased its dividend for 1 consecutive years. ADTRAN is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
QUALCOMM beats ADTRAN on 11 of the 17 factors compared between the two stocks.