Alcatel Lucent SA (NYSE: ALU) and Motorola Solutions (NYSE:MSI) are both mid-cap technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Earnings and Valuation

This table compares Alcatel Lucent SA and Motorola Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alcatel Lucent SA N/A N/A N/A N/A N/A
Motorola Solutions $6.13 billion 2.41 $1.59 billion $3.62 25.01

Motorola Solutions has higher revenue and earnings than Alcatel Lucent SA.

Institutional & Insider Ownership

87.1% of Motorola Solutions shares are held by institutional investors. 2.5% of Motorola Solutions shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Alcatel Lucent SA and Motorola Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alcatel Lucent SA 14.83% 86.14% 10.96%
Motorola Solutions 10.10% -102.32% 10.07%

Analyst Ratings

This is a summary of recent ratings and price targets for Alcatel Lucent SA and Motorola Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alcatel Lucent SA 0 0 0 0 N/A
Motorola Solutions 0 4 8 0 2.67

Motorola Solutions has a consensus target price of $90.00, suggesting a potential downside of 0.57%. Given Motorola Solutions’ higher possible upside, analysts plainly believe Motorola Solutions is more favorable than Alcatel Lucent SA.

Dividends

Motorola Solutions pays an annual dividend of $1.88 per share and has a dividend yield of 2.1%. Alcatel Lucent SA does not pay a dividend. Motorola Solutions pays out 51.9% of its earnings in the form of a dividend. Alcatel Lucent SA has increased its dividend for 6 consecutive years.

About Alcatel Lucent SA

Alcatel Lucent SA is a provider of Internet protocol (IP) networking, ultra-broadband access and cloud technology solutions. The Company operates through two segments for the networks business. The Ultra Broadband Networks segment consists of Mobile Networks and Fixed Networks business groups. The IP Networks and Applications segment consists of Internet protocol (IP)/Optical Networks and Applications and Analytics business groups. Its other segment consists of businesses run as separate operations (Alcatel Submarine Networks and Radio Frequency Systems (RFS)). The Company offers a range of solutions, including Communications and collaboration, IP Core Routing, IP/optical integration, long term evolution (LTE) Ultra-Broadband, Software-defined networking and Vplus. The Company offers a range of consulting, managed, maintenance and professional services, including Bell Labs Consulting and Build, Operate and Manage (BOM) Solution for Mobility Networks. The main shareholder is Nokia.

About Motorola Solutions

Motorola Solutions, Inc. is a provider of communication infrastructure, devices, accessories, software and services. The Company operates through two segments: Products and Services. The Company’s Products segment offers a portfolio of infrastructure, devices, accessories and software. The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers operating private communications networks and manage a mobile workforce. The Company’s Services segment provides a range of service offerings for government, public safety and commercial communication networks. The Services segment product lines include Integration services, Managed & Support services, and Integrated Digital Enhanced Network (iDEN) services.

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