DSP Group (NASDAQ: DSPG) and MRV Communications (NASDAQ:MRVC) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitabiliy and earnings.

Profitability

This table compares DSP Group and MRV Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DSP Group 3.52% 3.41% 2.69%
MRV Communications -10.63% -20.68% -10.70%

Analyst Recommendations

This is a summary of recent recommendations and price targets for DSP Group and MRV Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DSP Group 0 2 5 0 2.71
MRV Communications 0 0 1 0 3.00

DSP Group currently has a consensus target price of $14.17, suggesting a potential upside of 14.71%. MRV Communications has a consensus target price of $14.00, suggesting a potential upside of 42.13%. Given MRV Communications’ stronger consensus rating and higher possible upside, analysts plainly believe MRV Communications is more favorable than DSP Group.

Volatility and Risk

DSP Group has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, MRV Communications has a beta of -1.89, suggesting that its stock price is 289% less volatile than the S&P 500.

Insider & Institutional Ownership

76.1% of DSP Group shares are held by institutional investors. Comparatively, 42.1% of MRV Communications shares are held by institutional investors. 6.0% of DSP Group shares are held by company insiders. Comparatively, 5.5% of MRV Communications shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares DSP Group and MRV Communications’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DSP Group $138.14 million 1.98 $5.90 million $0.21 58.81
MRV Communications $82.61 million 0.81 -$5.04 million ($1.27) -7.76

DSP Group has higher revenue and earnings than MRV Communications. MRV Communications is trading at a lower price-to-earnings ratio than DSP Group, indicating that it is currently the more affordable of the two stocks.

Summary

DSP Group beats MRV Communications on 11 of the 13 factors compared between the two stocks.

About DSP Group

DSP Group, Inc. is a global provider of wireless and audio chipset solutions for converged communications. Delivering semiconductor system solutions with software and hardware reference designs, the Company enables original equipment manufacturers, original design manufacturers, consumer electronics manufacturers and service providers to develop new products. Its segments include Home, Office and Mobile. The Home segment includes wireless chipset solutions for converged communication at home. The Office segment offers solution for Voice-over-Internet protocol (VoIP) office products, including office solutions that provide businesses with VoIP terminals with converged voice and data applications. The Mobile segment offers products for the mobile market that provides voice enhancement, always-on and far-end noise elimination targeted for mobile phone and mobile headsets and wearable devices that incorporate its noise suppression and voice quality enhancement HDClear technology.

About MRV Communications

MRV Communications, Inc. (MRV) is a supplier of communications solutions to telecommunications service providers, enterprises and governments throughout the world. The Company’s products enable customers to provide high-bandwidth data, and video services and mobile communications services. The Company operates through Network Equipment segment. Its Network Equipment segment designs, manufactures, sells and services equipment used by commercial customers, governments and telecommunications service providers. Its products include switches, optical transport platforms, physical layer products and out-of-band management products, and specialized networking products. MRV markets and sells its products, through a range of channels, which include a direct sales force, manufacturers’ representatives, value-added-resellers, distributors and systems integrators. The Network Equipment business includes two business units: Optical Communications Systems division and Appointech, Inc.

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