Comparing XG Technology (XGTI) and Ericsson (ERIC)

XG Technology (NASDAQ: XGTI) and Ericsson (NASDAQ:ERIC) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for XG Technology and Ericsson, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XG Technology 0 0 2 0 3.00
Ericsson 2 7 4 0 2.15

XG Technology currently has a consensus target price of $3.75, suggesting a potential upside of 130.06%. Ericsson has a consensus target price of $5.34, suggesting a potential downside of 15.24%. Given XG Technology’s stronger consensus rating and higher possible upside, analysts clearly believe XG Technology is more favorable than Ericsson.

Valuation and Earnings

This table compares XG Technology and Ericsson’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
XG Technology $6.57 million 3.64 -$20.90 million N/A N/A
Ericsson $26.02 billion 0.81 $200.60 million ($0.61) -10.33

Ericsson has higher revenue and earnings than XG Technology.

Profitability

This table compares XG Technology and Ericsson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XG Technology -20.76% -26.16% -15.69%
Ericsson -8.60% -5.67% -2.57%

Volatility and Risk

XG Technology has a beta of -0.72, suggesting that its stock price is 172% less volatile than the S&P 500. Comparatively, Ericsson has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.

Institutional & Insider Ownership

2.3% of XG Technology shares are held by institutional investors. Comparatively, 8.1% of Ericsson shares are held by institutional investors. 2.8% of XG Technology shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 1.1%. XG Technology does not pay a dividend. Ericsson pays out -11.5% of its earnings in the form of a dividend.

Summary

Ericsson beats XG Technology on 10 of the 14 factors compared between the two stocks.

XG Technology Company Profile

xG Technology, Inc. develops a portfolio of intellectual property, which is embedded in its software algorithms that offer cognitive interference mitigation and spectrum access solutions for a range of applications using commercial off the shelf devices. The Company is a provider of wireless video solutions to broadcast, law enforcement and defense markets, and private mobile broadband networks for use in a range of environments. The Company markets its technology solutions across three business units: Integrated Microwave Technologies (IMT), Vislink Communication Systems and xMax. The Company offers a range of frequency-agnostic cognitive radio solutions. It focuses on various industries across the world, such as telecommunications, cable, defense and public safety, municipal governments, critical infrastructure and markets ranging from rural to urban areas and expeditionary deployments.

Ericsson Company Profile

Telefonaktiebolaget LM Ericsson (Ericsson) provides infrastructure, services and software to the telecommunication industry and other sectors. The Company’s segments include Networks, IT & Cloud and Media. The Networks segment consists of two business units: Network Products and Network Services. The overall focus is on evolving and managing access networks, including the development of hardware and software for radio access and transport networks. The IT & Cloud business includes two business units: IT & Cloud Products and IT & Cloud Services. The focus in IT & Cloud is to help telecom operators and selected enterprises through the digital transformations ahead. It develops and delivers software-based solutions for television and media and combines a product portfolio that spans the television value chain, with systems integration and managed services. The portfolio includes compression, content publishing through set-top box or pure over-the-top, content delivery and analytics.

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