Netgear (NASDAQ: NTGR) and Echelon (NASDAQ:ELON) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Insider and Institutional Ownership
97.5% of Netgear shares are owned by institutional investors. Comparatively, 24.1% of Echelon shares are owned by institutional investors. 6.2% of Netgear shares are owned by company insiders. Comparatively, 9.1% of Echelon shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Netgear and Echelon’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Netgear has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500. Comparatively, Echelon has a beta of -0.81, indicating that its stock price is 181% less volatile than the S&P 500.
Earnings and Valuation
This table compares Netgear and Echelon’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Netgear||$1.41 billion||1.26||$19.43 million||$0.53||106.61|
|Echelon||$31.67 million||0.67||-$4.62 million||($1.04)||-4.48|
Netgear has higher revenue and earnings than Echelon. Echelon is trading at a lower price-to-earnings ratio than Netgear, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Netgear and Echelon, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Netgear currently has a consensus target price of $64.50, suggesting a potential upside of 14.16%. Given Netgear’s higher probable upside, research analysts plainly believe Netgear is more favorable than Echelon.
Netgear beats Echelon on 12 of the 13 factors compared between the two stocks.
Netgear Company Profile
NETGEAR, Inc. designs, develops, and markets networking and Internet connected products for consumers, businesses, and service providers. The company operates in three segments: Arlo, Connected Home, and Small and Medium Business. It offers smart home/connected home/broadband access products, such as remote video security systems, broadband modems, WiFi gateways, WiFi hotspots, WiFi routers and home WiFi systems, WiFi range extenders, Powerline adapters and bridges, and WiFi network adapters. The company also provides Ethernet switches, wireless controllers and access points, unified storage products, and Internet security appliances for small and medium-sized businesses. It markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers in the Americas, Europe, the Middle-East, Africa, and the Asia Pacific. NETGEAR, Inc. was founded in 1996 and is headquartered in San Jose, California.
Echelon Company Profile
Echelon Corporation develops open-standard control networking platforms and delivers elements necessary to design, install, monitor and control communities of devices. The Company’s products enable everyday devices, such as air conditioners, outdoor lighting, appliances, electricity meters, light switches, thermostats and valves to be inter-connected and be part of the Industrial Internet of Things (IIoT) market. It operates through the IIoT segment. Its IIoT business sells products and services that form embedded control platforms, such as LONWORKS and IzoT. The Company’s IIoT business also sells products and services, which include components, control nodes and development software. The Company also offers a solution consisting of outdoor lighting controllers, segment controllers, gateways and software to end customers, such as municipalities, cities, campuses and commercial enterprises. The Company markets its products under the Echelon brand.
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