Dot Hill Systems Corp. (NASDAQ: HILL) and Western Digital Corporation (NASDAQ:WDC) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, risk, valuation, dividends and analyst recommendations.

Dividends

Western Digital Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.1%. Dot Hill Systems Corp. does not pay a dividend. Western Digital Corporation pays out -202.0% of its earnings in the form of a dividend.

Profitability

This table compares Dot Hill Systems Corp. and Western Digital Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dot Hill Systems Corp. 1.11% 3.86% 2.27%
Western Digital Corporation -1.32% 16.01% 5.81%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Dot Hill Systems Corp. and Western Digital Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dot Hill Systems Corp. 0 1 0 0 2.00
Western Digital Corporation 0 5 26 1 2.88

Western Digital Corporation has a consensus target price of $102.72, indicating a potential upside of 8.76%. Given Western Digital Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Western Digital Corporation is more favorable than Dot Hill Systems Corp..

Earnings & Valuation

This table compares Dot Hill Systems Corp. and Western Digital Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dot Hill Systems Corp. N/A N/A N/A N/A N/A
Western Digital Corporation $17.75 billion 1.55 $3.51 billion ($0.99) -95.39

Western Digital Corporation has higher revenue and earnings than Dot Hill Systems Corp..

Insider and Institutional Ownership

82.3% of Western Digital Corporation shares are held by institutional investors. 0.5% of Western Digital Corporation 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.

Summary

Western Digital Corporation beats Dot Hill Systems Corp. on 11 of the 12 factors compared between the two stocks.

About Dot Hill Systems Corp.

Dot Hill Systems Corp. (Dot Hill) is engaged in designing, manufacturing and marketing a range of storage systems, including hybrid storage arrays, for the entry and mid-range storage markets. The Company operates through two business segments: Server OEM and Vertical Markets. The Server OEM segment consists of Original Equipment Manufacturers (OEM) who purchases products from the Company to sell along with server products. The Company’s products are sold in server led sales into its end-user customers’ corporate information technology infrastructure. The Vertical Markets segment consists of selected Vertical Markets, which includes Media and Entertainment, Telecommunications Infrastructure, Oil and Gas, Big Data Analytics and Digital Imaging, among others. The Company sells its products to customers through both Vertical Markets OEM partners or embedded solutions integrators, as well as through channel partners.

About Western Digital Corporation

Western Digital Corporation (Western Digital) is a developer, manufacturer and provider of data storage devices and solutions that address the needs of the information technology (IT) industry and the infrastructure that enables the proliferation of data in virtually every industry. The Company’s portfolio of offerings addresses three categories: Datacenter Devices and Solutions (capacity and performance enterprise hard disk drives (HDDs), enterprise solid state drives (SSDs), datacenter software and system solutions); Client Devices (mobile, desktop, gaming and digital video hard drives, client SSDs, embedded products and wafers), and Client Solutions (removable products, hard drive content solutions and flash content solutions). The Company develops and manufactures a portion of the recording heads and magnetic media used in its hard drive products.

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