Commscope (NASDAQ: COMM) and Brocade Communications Systems (NASDAQ:BRCD) are both mid-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.
Valuation & Earnings
This table compares Commscope and Brocade Communications Systems’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Commscope||$4.56 billion||1.70||$193.76 million||$1.10||37.00|
|Brocade Communications Systems||$2.35 billion||2.25||$213.81 million||$0.07||181.86|
Brocade Communications Systems has lower revenue, but higher earnings than Commscope. Commscope is trading at a lower price-to-earnings ratio than Brocade Communications Systems, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Commscope has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Brocade Communications Systems has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.
Brocade Communications Systems pays an annual dividend of $0.22 per share and has a dividend yield of 1.7%. Commscope does not pay a dividend. Brocade Communications Systems pays out 314.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a summary of recent ratings for Commscope and Brocade Communications Systems, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Brocade Communications Systems||1||3||0||0||1.75|
Commscope presently has a consensus target price of $42.63, indicating a potential upside of 4.73%. Brocade Communications Systems has a consensus target price of $12.83, indicating a potential upside of 0.81%. Given Commscope’s stronger consensus rating and higher possible upside, equities analysts plainly believe Commscope is more favorable than Brocade Communications Systems.
This table compares Commscope and Brocade Communications Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Brocade Communications Systems||-3.56%||-3.07%||-1.62%|
Institutional and Insider Ownership
83.7% of Brocade Communications Systems shares are owned by institutional investors. 3.3% of Commscope shares are owned by company insiders. Comparatively, 1.8% of Brocade Communications Systems shares are owned by company 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.
Commscope beats Brocade Communications Systems on 11 of the 16 factors compared between the two stocks.
Commscope Company Profile
CommScope Holding Company, Inc. (CommScope) is a provider of infrastructure solutions for the core, access and edge layers of communications networks. The Company operates through two segments: CommScope Connectivity Solutions (CCS) and CommScope Mobility Solutions (CMS). Its portfolio includes wireless and fiber optic solutions. The Company’s solutions are found in the venues and outdoor spaces, including in data centers and buildings of all shapes, sizes and complexities; at wireless cell sites; in telecom central offices and cable head ends; in fiber-to-the-X (FTTX) deployments, and in airports, trains and tunnels. As of December 31, 2016, it served customers in over 100 countries through a network of more than 30 manufacturing and distribution facilities located around the globe. Its customers include global telecommunication operators and enterprise customers, including Fortune 500 enterprises and multi-system operators (MSOs).
Brocade Communications Systems Company Profile
Brocade Communications Systems, Inc. (Brocade) is a supplier of networking hardware, software and services, including storage area networking (SAN) solutions and Internet protocol (IP) networking solutions for businesses and organizations of various types and sizes. The Company operates through three segments: SAN Products, IP Networking Products and Global Services. The SAN Products segment includes infrastructure products and solutions that help customers develop and deploy storage and server consolidation, disaster recovery and data security. The IP Networking Products segment includes Layer 2 and Layer 3 Ethernet switches, and routers to connect users over private and public networks. The Global Services segment includes break or fix maintenance, installation, consulting, network management and software maintenance, and post-contract customer support. Its products enable customers to deploy architectures and technologies, including virtualization and cloud computing.
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