Contrasting NETGEAR (NTGR) & DSP Group (DSPG)

DSP Group (NASDAQ: DSPG) and NETGEAR (NASDAQ:NTGR) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current ratings and recommmendations for DSP Group and NETGEAR, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DSP Group 0 2 5 0 2.71
NETGEAR 1 2 4 0 2.43

DSP Group presently has a consensus price target of $14.17, suggesting a potential upside of 21.08%. NETGEAR has a consensus price target of $63.00, suggesting a potential upside of 36.66%. Given NETGEAR’s higher possible upside, analysts plainly believe NETGEAR is more favorable than DSP Group.

Valuation & Earnings

This table compares DSP Group and NETGEAR’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DSP Group $133.28 million 1.95 $4.18 million $0.13 90.00
NETGEAR $1.36 billion 1.10 $134.02 million $2.18 21.15

NETGEAR has higher revenue and earnings than DSP Group. NETGEAR is trading at a lower price-to-earnings ratio than DSP Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

75.7% of DSP Group shares are owned by institutional investors. Comparatively, 99.5% of NETGEAR shares are owned by institutional investors. 6.0% of DSP Group shares are owned by company insiders. Comparatively, 6.2% of NETGEAR shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

DSP Group has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, NETGEAR has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.

Profitability

This table compares DSP Group and NETGEAR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DSP Group 2.40% 3.47% 2.74%
NETGEAR 5.42% 10.67% 7.43%

Summary

NETGEAR beats DSP Group on 10 of the 14 factors compared between the two stocks.

DSP Group Company Profile

DSP Group, Inc. is a global provider of wireless and audio chipset solutions for converged communications. Delivering semiconductor system solutions with software and hardware reference designs, the Company enables original equipment manufacturers, original design manufacturers, consumer electronics manufacturers and service providers to develop new products. Its segments include Home, Office and Mobile. The Home segment includes wireless chipset solutions for converged communication at home. The Office segment offers solution for Voice-over-Internet protocol (VoIP) office products, including office solutions that provide businesses with VoIP terminals with converged voice and data applications. The Mobile segment offers products for the mobile market that provides voice enhancement, always-on and far-end noise elimination targeted for mobile phone and mobile headsets and wearable devices that incorporate its noise suppression and voice quality enhancement HDClear technology.

NETGEAR Company Profile

NETGEAR, Inc. designs, develops and markets networking solutions and smart connected products for consumers, businesses and service providers. The Company’s product line consists of devices, such as network attached storage, Internet protocol (IP) security cameras, and home automation devices and services. The Company’s segments include retail, commercial and service provider. The retail business unit is focused on individual consumers and consists of whole home wireless fidelity (WiFi) networking solutions and Smart connected products. The commercial business unit is focused on small and medium-sized businesses and consists of business networking, storage and security solutions. The service provider business unit is focused on the service provider market and consists of made-to-order and retail-proven whole home networking hardware and software solutions, including fourth-generation (4G) long term evolution (LTE) hotspots sold to service providers for sale to their subscribers.

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