Critical Contrast: Garmin (GRMN) and PC-Tel (PCTI)
Garmin (NASDAQ: GRMN) and PC-Tel (NASDAQ:PCTI) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitabiliy and risk.
Valuation and Earnings
This table compares Garmin and PC-Tel’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Garmin||$3.03 billion||3.19||$724.33 million||$3.49||14.71|
|PC-Tel||$100.62 million||1.32||$3.72 million||($1.01)||-7.40|
Garmin has higher revenue and earnings than PC-Tel. PC-Tel is trading at a lower price-to-earnings ratio than Garmin, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Garmin and PC-Tel, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Garmin currently has a consensus price target of $50.50, indicating a potential downside of 1.62%. PC-Tel has a consensus price target of $8.33, indicating a potential upside of 11.56%. Given PC-Tel’s stronger consensus rating and higher probable upside, analysts clearly believe PC-Tel is more favorable than Garmin.
Volatility and Risk
Garmin has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, PC-Tel has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.
This table compares Garmin and PC-Tel’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
41.7% of Garmin shares are held by institutional investors. Comparatively, 71.2% of PC-Tel shares are held by institutional investors. 18.3% of Garmin shares are held by company insiders. Comparatively, 10.5% of PC-Tel shares are held by company 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.
Garmin pays an annual dividend of $2.04 per share and has a dividend yield of 4.0%. PC-Tel pays an annual dividend of $0.20 per share and has a dividend yield of 2.7%. Garmin pays out 58.5% of its earnings in the form of a dividend. PC-Tel pays out -19.8% 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.
Garmin beats PC-Tel on 11 of the 16 factors compared between the two stocks.
Garmin Company Profile
Garmin Ltd. (Garmin) and subsidiaries offer global positioning system (GPS) navigation and wireless devices and applications. The Company operates through five segments. It offers a range of auto navigation products, as well as a range of products and applications designed for the mobile GPS market. It offers products to consumers around the world, including Outdoor Handhelds, Wearable Devices, Golf Devices, and Dog Tracking and Training/Pet Obedience Devices. It offers a range of products designed for use in fitness and activity tracking. Garmin offers a range of products designed for use in fitness and activity tracking. Its aviation business segment is a provider of solutions to aircraft manufacturers, existing aircraft owners and operators, as well as military and government customers and serves a range of aircraft, including transport aircraft, business aviation, general aviation, experimental/light sport, helicopters, optionally piloted vehicles and unmanned aerial vehicles.
PC-Tel Company Profile
PCTEL, Inc. (PCTEL) delivers telecom solutions. The Company operates in two segments: Connected Solutions and RF Solutions. The RF Solutions segment develops and provides test equipment, software and engineering services for wireless networks. The Connected Solutions segment designs and delivers antennas and site solutions for wireless networks globally. PCTEL antennas and site solutions support networks across the world, including Supervisory Control and Data Acquisition (SCADA) for oil, gas and utilities, fleet management, industrial operations, healthcare, small cell and network timing deployment, defense, public safety, education and broadband access. Its SeeGull flex scanning receivers are used around the world for indoor and drive test applications, including baseline testing, acceptance testing, spectrum clearing, troubleshooting and network optimization. PCTEL provides wireless network testing, commissioning, optimization, design, integration and consulting services.
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