InterDigital (NASDAQ: IDCC) and Sonus Networks (NASDAQ:SONS) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.
Earnings & Valuation
This table compares InterDigital and Sonus Networks’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|InterDigital||$712.48 million||3.57||$534.85 million||$7.24||10.13|
|Sonus Networks||$241.68 million||1.60||-$12.30 million||($0.45)||-17.33|
InterDigital has higher revenue and earnings than Sonus Networks. Sonus Networks is trading at a lower price-to-earnings ratio than InterDigital, indicating that it is currently the more affordable of the two stocks.
This table compares InterDigital and Sonus Networks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
InterDigital pays an annual dividend of $1.40 per share and has a dividend yield of 1.9%. Sonus Networks does not pay a dividend. InterDigital pays out 19.3% of its earnings in the form of a dividend.
Institutional and Insider Ownership
75.3% of InterDigital shares are owned by institutional investors. Comparatively, 68.3% of Sonus Networks shares are owned by institutional investors. 1.9% of InterDigital shares are owned by company insiders. Comparatively, 7.7% of Sonus Networks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility and Risk
InterDigital has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Sonus Networks has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500.
This is a breakdown of current ratings for InterDigital and Sonus Networks, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
InterDigital currently has a consensus price target of $91.33, indicating a potential upside of 24.52%. Sonus Networks has a consensus price target of $8.71, indicating a potential upside of 11.65%. Given InterDigital’s higher probable upside, analysts clearly believe InterDigital is more favorable than Sonus Networks.
InterDigital beats Sonus Networks on 10 of the 15 factors compared between the two stocks.
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 Sonus Networks
Sonus Networks, Inc. (Sonus) is a provider of networked solutions for communications service providers and enterprises to help them secure and unify their real-time communications infrastructures. The Company helps communications service providers and enterprises hold the session initiation protocol (SIP) and fourth generation (4G)/long term evolution (LTE)-based solutions, including voice over Internet protocol (VoIP), voice over wireless fidelity (VoWiFi), video and unified communications (UC) by securing and enabling Internet Protocol (IP) networks. Its products include session border controllers (SBCs), diameter signaling controllers (DSCs) and VoWiFi solutions. Sonus Products include Sonus GSX9000 Open Services Switch, Sonus T7000 Intelligent Switching System, Sonus Diameter Signaling Controllers, Sonus Signal Transfer Points, Sonus PSX Policy & Routing Server, Sonus WebRTC Services Solution, Sonus Network Management Solutions and Virtualized Mobile Core (VMC) Solution.
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