Mitel Networks (MITL) vs. American Software (AMSWA) Critical Contrast

Mitel Networks (NASDAQ: MITL) and American Software (NASDAQ:AMSWA) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Mitel Networks and American Software, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mitel Networks 0 1 1 0 2.50
American Software 0 0 1 0 3.00

Mitel Networks currently has a consensus target price of $11.25, suggesting a potential upside of 47.06%. American Software has a consensus target price of $14.00, suggesting a potential upside of 18.85%. Given Mitel Networks’ higher probable upside, equities research analysts plainly believe Mitel Networks is more favorable than American Software.

Institutional & Insider Ownership

80.1% of Mitel Networks shares are held by institutional investors. Comparatively, 75.7% of American Software shares are held by institutional investors. 16.5% of Mitel Networks shares are held by insiders. Comparatively, 13.9% of American Software shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

American Software pays an annual dividend of $0.44 per share and has a dividend yield of 3.7%. Mitel Networks does not pay a dividend. American Software pays out 74.6% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Mitel Networks and American Software’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mitel Networks $987.60 million 0.93 -$217.30 million ($2.06) -3.71
American Software $106.29 million 3.29 $14.62 million $0.59 19.97

American Software has lower revenue, but higher earnings than Mitel Networks. Mitel Networks is trading at a lower price-to-earnings ratio than American Software, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mitel Networks and American Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mitel Networks -26.71% -9.36% -2.42%
American Software 16.73% 17.53% 12.32%

Volatility & Risk

Mitel Networks has a beta of 2.67, suggesting that its share price is 167% more volatile than the S&P 500. Comparatively, American Software has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Summary

American Software beats Mitel Networks on 8 of the 14 factors compared between the two stocks.

Mitel Networks Company Profile

Mitel Networks Corporation is a provider of business communications and collaboration software, services and solutions. The Company’s segments include Cloud and Enterprise. The Enterprise segment sells and supports products and services for premise-based customers. The Cloud segment sells and supports products that are deployed in a cloud environment. The Company’s product portfolio includes premises and cloud-based enterprise communications infrastructure products and solutions, unified communications and collaboration (UCC) and contact center applications and a range of service offerings. The Company’s Cloud Division offers a range of private, public, hybrid and mobile Software as a Service (SaaS) solutions for businesses of all sizes. This includes Unified Communications as a Service (UCaaS) solutions. Its Enterprise Division portfolio integrates voice, UCC applications, and contact center applications on fixed and mobile networks across a range of end user devices.

American Software Company Profile

American Software, Inc. (American Software) develops, markets and supports a portfolio of software and services that delivers enterprise management, supply chain and retail planning solutions to the marketplace. The Company operates through three business segments: Supply Chain Management (SCM), Enterprise Resource Planning (ERP) and Information Technology (IT) Consulting. The SCM segment consists of Logility, Inc. and its subsidiary, Demand Management, Inc. (DMI), both of which provide supply chain and retail planning solutions to trading partners. The ERP segment consist of American Software ERP, which provides business software for manufacturers and distributors, and New Generation Computing, Inc. (NGC), which provides industry-specific business software to both retailers and manufacturers in the apparel, footwear, sewn products and furniture industries. The IT Consulting segment consists of The Proven Method, Inc., an IT staffing and consulting services firm.

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