Gilat Satellite Networks (NASDAQ: GILT) and InterDigital (NASDAQ:IDCC) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitabiliy and earnings.

Dividends

InterDigital pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. Gilat Satellite Networks does not pay a dividend. InterDigital pays out 13.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Gilat Satellite Networks and InterDigital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gilat Satellite Networks 0 0 0 0 N/A
InterDigital 0 3 2 0 2.40

InterDigital has a consensus price target of $91.33, suggesting a potential upside of 31.13%. Given InterDigital’s higher possible upside, analysts clearly believe InterDigital is more favorable than Gilat Satellite Networks.

Valuation and Earnings

This table compares Gilat Satellite Networks and InterDigital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gilat Satellite Networks $289.16 million 1.05 $25.44 million $0.07 79.71
InterDigital $712.48 million 3.39 $534.85 million $9.23 7.55

InterDigital has higher revenue and earnings than Gilat Satellite Networks. InterDigital is trading at a lower price-to-earnings ratio than Gilat Satellite Networks, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

7.9% of Gilat Satellite Networks shares are held by institutional investors. Comparatively, 69.3% of InterDigital shares are held by institutional investors. 1.1% of Gilat Satellite Networks shares are held by company insiders. Comparatively, 1.9% of InterDigital 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.

Profitability

This table compares Gilat Satellite Networks and InterDigital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gilat Satellite Networks 1.27% 6.63% 3.73%
InterDigital 45.92% 44.58% 19.04%

Volatility & Risk

Gilat Satellite Networks has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, InterDigital has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Summary

InterDigital beats Gilat Satellite Networks on 13 of the 15 factors compared between the two stocks.

Gilat Satellite Networks Company Profile

Gilat Satellite Networks Ltd. is a provider of satellite-based broadband communications. The Company operates through three segments: Commercial, Mobility and Services divisions. The Company designs and manufactures satellite ground segment and networking communications equipment, which it sells to its customers either as network components (modems, Block Up converters (BUCs), antennas) or as complete network solutions (which include hubs and related terminals and services) or turnkey projects. The equipment that the Company develops includes commercial Very Small Aperture Terminals (VSAT) systems, defense and homeland security satellite communications systems, solid-state power amplifiers (SSPAs), BUCs, low-profile antennas, on-the-Move/on-the-Pause terminals and modems. The Company’s equipment is used by satellite operators, service providers, telecommunications operators, system integrators, government and defense organizations, large corporations and enterprises.

InterDigital Company Profile

InterDigital, Inc. designs and develops technologies for wireless communications. The Company is focused on three technology areas: cellular wireless technology, Internet of things (IoT) technology, and, through its Hillcrest Laboratories, Inc. (Hillcrest Labs) subsidiary, sensor and sensor fusion technology. It offers a range of technologies that are used in digital cellular and wireless products and networks, including second generation (2G), third generation (3G), fourth generation (4G) and IEEE 802-related products and networks. Products incorporating its inventions include mobile devices, such as cellular phones, tablets, notebook computers and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; components, dongles and modules for wireless devices, and IoT devices and software platforms. The Company is developing a range of technologies in the areas of video compression and delivery, security, analytics, and other areas.

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