West (NASDAQ: WSTC) and Harris (NYSE:HRS) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.
West pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. Harris pays an annual dividend of $2.28 per share and has a dividend yield of 1.4%. West pays out 17.9% of its earnings in the form of a dividend. Harris pays out 53.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Harris has increased its dividend for 16 consecutive years. West is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of recent ratings and price targets for West and Harris, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
West currently has a consensus target price of $23.75, indicating a potential upside of 1.06%. Harris has a consensus target price of $152.83, indicating a potential downside of 3.38%. Given West’s higher probable upside, equities research analysts clearly believe West is more favorable than Harris.
Valuation and Earnings
This table compares West and Harris’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Harris||$5.90 billion||3.18||$553.00 million||$4.23||37.39|
Harris has higher revenue and earnings than West. West is trading at a lower price-to-earnings ratio than Harris, indicating that it is currently the more affordable of the two stocks.
This table compares West and Harris’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
67.4% of West shares are held by institutional investors. Comparatively, 85.0% of Harris shares are held by institutional investors. 4.6% of West shares are held by company insiders. Comparatively, 1.9% of Harris shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Harris beats West on 10 of the 14 factors compared between the two stocks.
West Company Profile
West Corporation is a provider of communication and network infrastructure services. The Company helps its clients communicate, collaborate and connect with their audiences through a portfolio of solutions that include unified communications services, safety services, and interactive services, such as automated notifications, specialized agent services and telecom services. The Company’s segments include Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes carrier services, government solutions and advanced services; Interactive Services, including outbound (proactive notifications-voice, text/short messaging service (SMS) and chat), inbound speech solutions (interactive voice response or IVR), Web, mobile and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation.
Harris Company Profile
Harris Corporation is a technology company that provides products, systems and services that have defense and civil government applications, as well as commercial applications. It offers its products and services to government and commercial customer. It operates in four segments: Communication Systems, which serves markets in tactical communications and defense, and public safety networks; Space and Intelligence Systems, which provides complete Earth observation, environmental, geospatial, space protection, and intelligence solutions from advanced sensors and payloads, as well as ground processing and information analytics; Electronic Systems, which offers a portfolio of solutions in electronic warfare, avionics, wireless and technology, among others, and Critical Networks, which provides managed services supporting air traffic management, energy and maritime communications, and ground network operation and sustainment, as well as information technology (IT) and engineering services.
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