Xerox (XRX) & Interlink Electronics (LINK) Critical Contrast

Xerox (NYSE:XRX) and Interlink Electronics (NASDAQ:LINK) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares Xerox and Interlink Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xerox 0.34% 16.50% 5.63%
Interlink Electronics 5.99% 7.39% 6.93%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Xerox and Interlink Electronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xerox 0 2 4 0 2.67
Interlink Electronics 0 0 0 0 N/A

Xerox currently has a consensus target price of $35.88, indicating a potential upside of 32.53%. Given Xerox’s higher probable upside, research analysts plainly believe Xerox is more favorable than Interlink Electronics.

Insider and Institutional Ownership

87.7% of Xerox shares are owned by institutional investors. Comparatively, 0.4% of Interlink Electronics shares are owned by institutional investors. 0.2% of Xerox shares are owned by insiders. Comparatively, 73.8% of Interlink Electronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Xerox has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Interlink Electronics has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Earnings & Valuation

This table compares Xerox and Interlink Electronics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Xerox $10.27 billion 0.63 $195.00 million $3.48 7.78
Interlink Electronics $11.15 million 1.95 $1.26 million N/A N/A

Xerox has higher revenue and earnings than Interlink Electronics.

Dividends

Xerox pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Interlink Electronics does not pay a dividend. Xerox pays out 28.7% of its earnings in the form of a dividend. Xerox has increased its dividend for 5 consecutive years.

Summary

Xerox beats Interlink Electronics on 9 of the 15 factors compared between the two stocks.

About Xerox

Xerox Corporation designs, develops, and sells document management systems and solutions worldwide. It offers managed document services, including managed print services and multi-channel communication services, as well as a range of digital solutions, such as workflow automation services, content management, and digitization services. The company also provides desktop monochrome and color printers, and multifunction printers; copiers, digital printing presses and light production devices, and solutions; graphic communications and commercial printers; inkjet presses; and FreeFlow portfolio of software solutions for the automation and integration of print jobs processing. In addition, it sells paper products, wide-format systems, and global imaging systems network integration solutions. The company sells its products and services directly to its customers through sales force, as well as through independent agents, dealers, value-added resellers, systems integrators, and the Web. Xerox Corporation was founded in 1906 and is headquartered in Norwalk, Connecticut.

About Interlink Electronics

Interlink Electronics, Inc., together with its subsidiaries, designs, develops, manufactures, and sells force-sensing technologies that incorporate proprietary materials technology, and firmware and software products and custom solutions. Its products comprise sensor components, subassemblies, and modules that support cursor control and novel three dimensional user inputs. The company also provides FSR sensors; force sensing linear potentiometers for menu navigation and control; and integrated mouse modules and pointing solutions to various electronic devices. In addition, it offers human machine interface solutions that have various applications, including vehicle entry, vehicle multi-media control interface, rugged touch controls, presence detection, collision detection, speed and torque controls, biological monitoring, and others. The company serves Fortune 500 companies, start-ups, design houses, original design manufacturers, original equipment manufacturers, and universities in various markets, such as consumer electronics, automotive, industrial, and medical through direct sales employees, as well as outside sales representatives and distributors. It operates in the United States, Asia and Middle East, Europe, and internationally. Interlink Electronics, Inc. was founded in 1985 and is headquartered in Westlake Village, California.

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