EMC (NYSE: EMC) and QLogic (NASDAQ:QLGC) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitabiliy and risk.

Insider and Institutional Ownership

79.9% of EMC shares are held by institutional investors. 0.4% of EMC 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.

Risk & Volatility

EMC has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, QLogic has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Earnings & Valuation

This table compares EMC and QLogic’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EMC N/A N/A N/A $1.07 27.15
QLogic N/A N/A N/A $0.75 21.43

QLogic is trading at a lower price-to-earnings ratio than EMC, indicating that it is currently the more affordable of the two stocks.

Dividends

EMC pays an annual dividend of $0.46 per share and has a dividend yield of 1.6%. QLogic does not pay a dividend. EMC pays out 43.0% of its earnings in the form of a dividend. EMC has increased its dividend for 3 consecutive years.

Profitability

This table compares EMC and QLogic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMC 10.47% 10.66% 5.47%
QLogic 15.71% 9.67% 8.76%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for EMC and QLogic, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMC 0 6 2 0 2.25
QLogic 0 0 0 0 N/A

EMC currently has a consensus target price of $29.70, indicating a potential upside of 2.23%. Given EMC’s higher probable upside, equities analysts clearly believe EMC is more favorable than QLogic.

Summary

EMC beats QLogic on 9 of the 12 factors compared between the two stocks.

About EMC

EMC Corporation (EMC) develops, delivers and supports the information technology (IT) industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC manages the Company as part of a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure, Pivotal and Virtustream. EMC’s Information Infrastructure business provides a foundation for organizations to store, manage, protect, analyze and secure information. EMC’s VMware Virtual Infrastructure business is engaged in virtualization and cloud infrastructure solutions that enable businesses to help transform the way they build, deliver and consume IT resources in a manner that is based on their specific needs. EMC’s Pivotal business unites strategic technology, people and programs from EMC and VMware and has a platform that consists of data, agile development practices and a cloud independent platform-as-a-service.

About QLogic

QLogic Corporation (QLogic), designs and supplies server and storage networking connectivity products that provide and manage computer data communication. The Company’s products facilitate the transfer of data and enable resource sharing between servers, networks and storage. Its products are used in enterprise, managed service provider, consumer Web, and cloud service provider data centers. Its products are based primarily on Fiber Channel and Ethernet technologies and are used in connection with storage networks, data networks and converged networks. Storage networks are used to provide access to storage across enterprise environments. Fibre Channel is a technology for enterprise storage networking. Data networks are used to provide workstation-to-server, server-to-server, and server-to-storage connectivity using Ethernet. Converged networks are designed to address the data center by consolidating and unifying storage and data networks, using high-speed Ethernet.

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