Head-To-Head Analysis: InterDigital (IDCC) vs. EMCORE Corporation (NASDAQ:EMKR)

InterDigital (NASDAQ: IDCC) and EMCORE Corporation (NASDAQ:EMKR) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

68.5% of InterDigital shares are owned by institutional investors. Comparatively, 76.3% of EMCORE Corporation shares are owned by institutional investors. 1.9% of InterDigital shares are owned by company insiders. Comparatively, 0.8% of EMCORE Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for InterDigital and EMCORE Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InterDigital 0 3 2 0 2.40
EMCORE Corporation 0 1 2 0 2.67

InterDigital currently has a consensus target price of $91.33, indicating a potential upside of 32.56%. EMCORE Corporation has a consensus target price of $11.50, indicating a potential upside of 32.95%. Given EMCORE Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe EMCORE Corporation is more favorable than InterDigital.

Earnings & Valuation

This table compares InterDigital and EMCORE Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
InterDigital $712.48 million 3.36 $534.85 million $9.23 7.46
EMCORE Corporation $119.32 million 1.95 $13.00 million $0.30 28.83

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

Dividends

InterDigital pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. EMCORE Corporation does not pay a dividend. InterDigital pays out 13.0% of its earnings in the form of a dividend.

Profitability

This table compares InterDigital and EMCORE Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InterDigital 45.92% 44.58% 19.04%
EMCORE Corporation 6.73% 9.25% 7.71%

Risk & Volatility

InterDigital has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, EMCORE Corporation has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Summary

InterDigital beats EMCORE Corporation on 10 of the 15 factors compared between the two stocks.

About InterDigital

InterDigital, Inc. designs and develops technologies for wireless communications. The Company is focused on three technology areas: cellular wireless technology, Internet of things (IoT) technology, and, through its Hillcrest Laboratories, Inc. (Hillcrest Labs) subsidiary, sensor and sensor fusion technology. It offers a range of technologies that are used in digital cellular and wireless products and networks, including second generation (2G), third generation (3G), fourth generation (4G) and IEEE 802-related products and networks. Products incorporating its inventions include mobile devices, such as cellular phones, tablets, notebook computers and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; components, dongles and modules for wireless devices, and IoT devices and software platforms. The Company is developing a range of technologies in the areas of video compression and delivery, security, analytics, and other areas.

About EMCORE Corporation

EMCORE Corporation is engaged in designing and manufacturing indium phosphide (InP) optical chips, components, subsystems and systems for the broadband and specialty fiber optics market. The Company focuses on linear fiber optic transmission technology. The Company operates through Fiber Optics segment. The Company provides optical components, and also end-to-end solutions for high-speed communications network infrastructures. The Company’s optical technologies are designed for cable television (CATV) and fiber-to-the-premise (FTTP) networks, telecommunications and data centers, satellite communications, aerospace and defense, wireless networks, and broadcast and professional audio/video systems. The Company’s fiber optics products enable information that is modulated on light signals to be transmitted, routed (switched) and received in communication systems and networks.

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