Telefonaktiebolaget LM Ericsson (NASDAQ: UBNT) and Ubiquiti Networks (NASDAQ:UBNT) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
This table compares Telefonaktiebolaget LM Ericsson and Ubiquiti Networks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telefonaktiebolaget LM Ericsson||-13.14%||-5.62%||-2.15%|
Volatility and Risk
Telefonaktiebolaget LM Ericsson has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Ubiquiti Networks has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
Telefonaktiebolaget LM Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 0.8%. Ubiquiti Networks pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. Telefonaktiebolaget LM Ericsson pays out -14.9% of its earnings in the form of a dividend. Ubiquiti Networks pays out 27.3% 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.
This is a breakdown of recent ratings and recommmendations for Telefonaktiebolaget LM Ericsson and Ubiquiti Networks, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telefonaktiebolaget LM Ericsson||2||6||3||0||2.09|
Telefonaktiebolaget LM Ericsson currently has a consensus price target of $5.91, indicating a potential downside of 30.60%. Ubiquiti Networks has a consensus price target of $71.33, indicating a potential downside of 20.07%. Given Ubiquiti Networks’ higher possible upside, analysts plainly believe Ubiquiti Networks is more favorable than Telefonaktiebolaget LM Ericsson.
Insider and Institutional Ownership
8.2% of Telefonaktiebolaget LM Ericsson shares are held by institutional investors. Comparatively, 26.1% of Ubiquiti Networks shares are held by institutional investors. 72.8% of Ubiquiti Networks shares are held by 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.
Valuation and Earnings
This table compares Telefonaktiebolaget LM Ericsson and Ubiquiti Networks’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Telefonaktiebolaget LM Ericsson||$23.60 billion||1.20||-$4.13 billion||($0.47)||-18.13|
|Ubiquiti Networks||$1.02 billion||6.50||$196.29 million||$3.66||24.38|
Ubiquiti Networks has lower revenue, but higher earnings than Telefonaktiebolaget LM Ericsson. Telefonaktiebolaget LM Ericsson is trading at a lower price-to-earnings ratio than Ubiquiti Networks, indicating that it is currently the more affordable of the two stocks.
Ubiquiti Networks beats Telefonaktiebolaget LM Ericsson on 11 of the 15 factors compared between the two stocks.
Telefonaktiebolaget LM Ericsson Company Profile
Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for networks, IT and cloud, and media markets worldwide. It operates through four segments: Networks, Digital Services, Managed Services, and Other. The Networks segment provides mobile radio access networks, transport solutions, and site solutions, as well as related services, such as network rollout, network tuning, and customer support. The Digital Services segment offers products and services for service providers in the areas of operations support systems and business support systems; packet core and communication; network functions virtualization and cloud infrastructure; application development and modernization; and consulting services. The Managed Services segment provides vendor agnostic services, including networks and IT managed, and network design and optimization services to manage service provider's networks. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.
Ubiquiti Networks Company Profile
Ubiquiti Networks, Inc. develops networking technology for service providers, enterprises, and consumers. It focuses on three principal technologies, including high-capacity distributed Internet access, unified information technology, and consumer electronics for home and personal use. The company's service provider product platforms offer carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems, and routing; and enterprise product platforms provide wireless LAN infrastructure, video surveillance products, switching and routing solutions, security gateways, and other WLAN products, as well as offers consumer products under the Ubiquiti Labs brand name. Its proprietary products and solutions include radios, antennas, software, communications protocols, and management tools to deliver wireless broadband access and other services. The company also provides technology platforms, such as airMAX platform, which include proprietary protocols that contain technologies for minimizing signal noise; EdgeMAX, a disruptive price-performance software and system routing platform; airFiber, a point-to-point radio system; and UFiber GPON platform to build high speed fiber Internet networks. In addition, it offers UniFi Enterprise WLAN; UniFi Video, a video surveillance system; UniFi Switch that deliver performance, switching, and PoE+ support for enterprise networks; and UniFi Security Gateway that provide routing and network security, as well as develops AmpliFi platform, a Wi-Fi system solution for connected homes. Further, Ubiquiti Networks, Inc. offers embedded radio products; and mounting brackets, cables, and power over Ethernet adapters. It serves customers through a network of approximately 100 distributors and online retailers worldwide. The company was formerly known as Pera Networks, Inc. and changed its name to Ubiquiti Networks, Inc. in 2005. Ubiquiti Networks, Inc. was incorporated in 2003 and is headquartered in New York, New York.
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