Aruba Networks (NASDAQ:ARUN) & Silicom (SILC) Critical Contrast

Aruba Networks (NASDAQ: ARUN) and Silicom (NASDAQ:SILC) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation & Earnings

This table compares Aruba Networks and Silicom’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aruba Networks N/A N/A N/A N/A N/A
Silicom $108.60 million 3.47 $21.32 million $1.93 26.28

Silicom has higher revenue and earnings than Aruba Networks.

Institutional and Insider Ownership

25.4% of Silicom shares are held by institutional investors. 25.4% of Silicom shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Silicom pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. Aruba Networks does not pay a dividend. Silicom pays out 51.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for Aruba Networks and Silicom, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aruba Networks 0 0 0 0 N/A
Silicom 0 0 1 0 3.00

Silicom has a consensus target price of $67.00, suggesting a potential upside of 32.07%. Given Silicom’s higher probable upside, analysts clearly believe Silicom is more favorable than Aruba Networks.

Profitability

This table compares Aruba Networks and Silicom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aruba Networks 2.67% 6.80% 3.49%
Silicom 13.34% 11.94% 9.67%

Summary

Silicom beats Aruba Networks on 9 of the 10 factors compared between the two stocks.

Aruba Networks Company Profile

Aruba Networks, Inc. is a global provider of enterprise mobility solutions. The Company develops markets and sell solutions that help solve its customers’ secure mobility requirements through its mobility-defined networks, a network architecture optimizes performance and trigger security actions that required manual intervention by information technology (IT) departments. Mobility-Defined Networks gather and correlate contextual data about user roles, device types, application flows and location, which is critical in dynamic, ever-changing mobility environments. This self-healing, self-optimizing approach to mobility reduces IT helpdesk tickets and offer data protection. Aruba Mobility-Defined Networks are consisted of three components such as, mobility-centric network infrastructure, access management and mobility applications.

Silicom Company Profile

Silicom Ltd. (Silicom) is engaged in the design, manufacture, marketing and support of networking and data infrastructure solutions for a range of servers, server-based systems and communications devices. The Company’s products include server network interface cards with and without bypass (Server Adapters); Intelligent and programmable cards, with features, such as encryption, acceleration, data compression, redirection, time stamping, network capture solutions, field programmable gate array (FPGA) based ultra-low latency solutions, and/or other offload features and/or compute blades (Smart Cards), and standalone Products. The Company’s market segments for its products include network appliances; servers; data storage, including Big Data; The Cloud, virtualized data centers, with and without software-defined networking (SDN), and Internet of Things (IOT).

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