Head-To-Head Review: Alcatel Lucent SA (ALU) versus Motorola Solutions (NYSE:MSI)

Motorola Solutions (NYSE: MSI) and Alcatel Lucent SA (NYSE:ALU) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Profitability

This table compares Motorola Solutions and Alcatel Lucent SA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Motorola Solutions 10.38% -93.44% 10.07%
Alcatel Lucent SA 14.83% 86.14% 10.96%

Valuation & Earnings

This table compares Motorola Solutions and Alcatel Lucent SA’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Motorola Solutions $6.19 billion 2.30 $1.60 billion $3.79 23.08
Alcatel Lucent SA N/A N/A N/A N/A N/A

Motorola Solutions has higher revenue and earnings than Alcatel Lucent SA.

Analyst Recommendations

This is a summary of current ratings for Motorola Solutions and Alcatel Lucent SA, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Motorola Solutions 0 3 8 0 2.73
Alcatel Lucent SA 0 0 0 0 N/A

Motorola Solutions currently has a consensus target price of $93.91, suggesting a potential upside of 7.35%. Given Motorola Solutions’ higher possible upside, equities analysts clearly believe Motorola Solutions is more favorable than Alcatel Lucent SA.

Insider & Institutional Ownership

87.3% of Motorola Solutions shares are owned by institutional investors. 2.5% of Motorola Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Motorola Solutions pays an annual dividend of $1.88 per share and has a dividend yield of 2.1%. Alcatel Lucent SA does not pay a dividend. Motorola Solutions pays out 49.6% of its earnings in the form of a dividend. Motorola Solutions has increased its dividend for 6 consecutive years.

Summary

Motorola Solutions beats Alcatel Lucent SA on 7 of the 12 factors compared between the two stocks.

Motorola Solutions Company Profile

Motorola Solutions, Inc. is a provider of communication infrastructure, devices, accessories, software and services. The Company operates through two segments: Products and Services. The Company’s Products segment offers a portfolio of infrastructure, devices, accessories and software. The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers operating private communications networks and manage a mobile workforce. The Company’s Services segment provides a range of service offerings for government, public safety and commercial communication networks. The Services segment product lines include Integration services, Managed & Support services, and Integrated Digital Enhanced Network (iDEN) services.

Alcatel Lucent SA Company Profile

Alcatel Lucent SA is a provider of Internet protocol (IP) networking, ultra-broadband access and cloud technology solutions. The Company operates through two segments for the networks business. The Ultra Broadband Networks segment consists of Mobile Networks and Fixed Networks business groups. The IP Networks and Applications segment consists of Internet protocol (IP)/Optical Networks and Applications and Analytics business groups. Its other segment consists of businesses run as separate operations (Alcatel Submarine Networks and Radio Frequency Systems (RFS)). The Company offers a range of solutions, including Communications and collaboration, IP Core Routing, IP/optical integration, long term evolution (LTE) Ultra-Broadband, Software-defined networking and Vplus. The Company offers a range of consulting, managed, maintenance and professional services, including Bell Labs Consulting and Build, Operate and Manage (BOM) Solution for Mobility Networks. The main shareholder is Nokia.

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