Contrasting Echostar (SATS) and Alcatel Lucent (ALU)

Echostar (NASDAQ: SATS) and Alcatel Lucent (NYSE:ALU) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Echostar 5.55% 2.85% 1.26%
Alcatel Lucent 14.83% 86.14% 10.96%

Risk & Volatility

Echostar has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Alcatel Lucent has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Echostar and Alcatel Lucent, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Echostar 0 1 1 0 2.50
Alcatel Lucent 0 0 0 0 N/A

Echostar presently has a consensus price target of $70.00, suggesting a potential upside of 14.68%. Given Echostar’s higher possible upside, analysts plainly believe Echostar is more favorable than Alcatel Lucent.

Insider and Institutional Ownership

44.5% of Echostar shares are owned by institutional investors. 73.5% of Echostar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Echostar and Alcatel Lucent’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Echostar $3.06 billion 1.91 $179.93 million $1.24 49.23
Alcatel Lucent N/A N/A N/A $0.08 43.25

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

Summary

Echostar beats Alcatel Lucent on 7 of the 11 factors compared between the two stocks.

About Echostar

EchoStar Corporation is a holding company. The Company is a provider of satellite operations, video delivery solutions, digital set-top boxes, and broadband satellite technologies and services for home and office, delivering network technologies, managed services, and solutions for enterprises and governments. The Company operates through three segments: Hughes, EchoStar Technologies (ETC) and EchoStar Satellite Services (ESS). The Company’s Hughes segment provides broadband satellite technologies and broadband services for the home and office, delivering network technologies, managed services and communication solutions to domestic and international consumers and enterprise and government customers. The ETC segment provides end-to-end video and broadcast technology products and services to businesses and directly to consumers. The ESS segment operates its business using its owned and leased in-orbit satellites. Its operations also include real estate and other activities.

About Alcatel Lucent

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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