Mitel Networks (MITL) & ARRIS International (ARRS) Financial Survey

Mitel Networks (NASDAQ: MITL) and ARRIS International (NASDAQ:ARRS) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Mitel Networks and ARRIS International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mitel Networks 0 3 1 0 2.25
ARRIS International 1 3 3 0 2.29

Mitel Networks currently has a consensus target price of $13.05, indicating a potential upside of 18.96%. ARRIS International has a consensus target price of $31.43, indicating a potential upside of 27.81%. Given ARRIS International’s stronger consensus rating and higher possible upside, analysts plainly believe ARRIS International is more favorable than Mitel Networks.

Valuation and Earnings

This table compares Mitel Networks and ARRIS International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mitel Networks $1.06 billion 1.27 -$49.70 million ($0.40) -27.43
ARRIS International $6.61 billion 0.69 $92.02 million $2.43 10.12

ARRIS International has higher revenue and earnings than Mitel Networks. Mitel Networks is trading at a lower price-to-earnings ratio than ARRIS International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mitel Networks and ARRIS International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mitel Networks -4.31% -14.62% -3.32%
ARRIS International 1.77% 16.38% 6.90%

Risk and Volatility

Mitel Networks has a beta of 2.43, meaning that its stock price is 143% more volatile than the S&P 500. Comparatively, ARRIS International has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Institutional & Insider Ownership

83.4% of Mitel Networks shares are held by institutional investors. Comparatively, 87.2% of ARRIS International shares are held by institutional investors. 5.6% of Mitel Networks shares are held by company insiders. Comparatively, 0.9% of ARRIS International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

ARRIS International beats Mitel Networks on 11 of the 14 factors compared between the two stocks.

Mitel Networks Company Profile

Mitel Networks Corporation provides cloud and on-site business communications and collaboration software, services, and solutions. It operates in two segments, Enterprise and Cloud. The Enterprise segment sells and supports products and services for premise-based customers, including its premise-based IP and TDM telephony platforms; desktop devices, and unified communications and collaborations (UCC); and contact center applications that are deployed on the customer's premise under the MiVoice brand. The Cloud segment offers retail cloud services, such as UCC applications, voice and data telecommunications, and desktop devices that provide hosted cloud and related services directly to the end users under the MiCloud brand. It also provides wholesale services comprising hosted PBX, voice and video calling, SIP trunking, voicemail, call center, audio conferencing, and video and Web collaboration services to service providers under the Powered by Mitel brand. The company sells its solutions through direct and indirect channels, as well as through strategic technology partnerships in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. Mitel Networks Corporation was incorporated in 2001 and is headquartered in Ottawa, Canada.

ARRIS International Company Profile

ARRIS International plc, together with its subsidiaries, provides entertainment, communications, and networking technology and solutions worldwide. It operates through three segments: Customer Premises Equipment, Network & Cloud, and Enterprise Networks. The Customer Premises Equipment segment offers digital subscriber lines and cable modems, broadband gateways, set-top boxes, and video gateways. The Network & Cloud segment provides cable modem termination system, converged cable access platform, passive optical network, service provider and programmer equipment, Ad insertion technologies, and equipment in the ground or on transmission poles, as well as equipment used to initiate the distribution of content-carrying signals. This segment also offers technical support and professional services; software products that enable providers to deliver content and advertising services; network management products that collect information from the broadband network; and customer experience management solutions, as well as network surveillance and issue correlation software and services. The Enterprise Networks segment provides wired Ethernet switches; and indoor, outdoor, and special-purpose Wi-Fi access points, as well as accessories, such as antennas. This segment also offers SmartCell Insight, a big data Wi-Fi analytics and reporting platform; ZonePlanner, a Wi-Fi planning and modeling software; Smart Positioning Technology, a cloud-based smart Wi-Fi location-based services platform; Cloudpath Wi-Fi device; mobile apps for controllers, cloud Wi-Fi, location, and performance testing; Ruckus Cloud Wi-Fi, a wireless local area network management-as-a-service; and ZoneDirector, a smart Wi-Fi controller. The company was formerly known as ARRIS Group, Inc. and changed its name to ARRIS International plc in January 2016. ARRIS International plc was founded in 1969 and is headquartered in Suwanee, Georgia.

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