ADTRAN (NASDAQ: ADTN) and Viavi Solutions (NASDAQ:VIAV) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Valuation and Earnings

This table compares ADTRAN and Viavi Solutions’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ADTRAN $686.83 million 1.51 $53.98 million $0.82 26.46
Viavi Solutions $811.40 million 2.80 $104.37 million $0.71 14.06

Viavi Solutions has higher revenue and earnings than ADTRAN. Viavi Solutions is trading at a lower price-to-earnings ratio than ADTRAN, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

89.5% of ADTRAN shares are owned by institutional investors. Comparatively, 92.5% of Viavi Solutions shares are owned by institutional investors. 3.0% of ADTRAN shares are owned by company insiders. Comparatively, 0.4% of Viavi Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares ADTRAN and Viavi Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ADTRAN 5.68% 8.39% 6.07%
Viavi Solutions 20.57% 8.46% 3.31%

Volatility and Risk

ADTRAN has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for ADTRAN and Viavi Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ADTRAN 0 2 4 0 2.67
Viavi Solutions 0 2 7 0 2.78

ADTRAN currently has a consensus price target of $24.00, suggesting a potential upside of 10.60%. Viavi Solutions has a consensus price target of $12.39, suggesting a potential upside of 24.11%. Given Viavi Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Viavi Solutions is more favorable than ADTRAN.

Dividends

ADTRAN pays an annual dividend of $0.36 per share and has a dividend yield of 1.7%. Viavi Solutions does not pay a dividend. ADTRAN pays out 43.9% of its earnings in the form of a dividend.

Summary

Viavi Solutions beats ADTRAN on 12 of the 16 factors compared between the two stocks.

ADTRAN Company Profile

ADTRAN, Inc. (ADTRAN) is a provider of networking and communications equipment. The Company’s solutions enable voice, data, video and Internet communications across a range of network infrastructures. It operates through two segments: Network Solutions and Services & Support. Network Solutions includes software and hardware products that enable CSPs and enterprise customers to realize a fully connected world. It provides a full-range of network implementation, maintenance and managed services. Its solutions include Access & Aggregation, Customer Devices, and Traditional & Other Products. Its Access & Aggregation solutions are used by communications service providers (CSPs) to connect their network infrastructure to their subscribers. The portfolio of ADTRAN solutions within Access & Aggregation category includes a range of modular or fixed physical form factors designed to deliver the technology and economic fit based on the target subscriber density and environmental conditions.

Viavi Solutions Company Profile

Viavi Solutions Inc. (Viavi) is a provider of network test, monitoring and assurance solutions to communications service providers, enterprises and their ecosystems. The Company also offers thin film optical coatings, providing light management solutions to anti-counterfeiting, consumer and industrial, government and healthcare and other markets. The Company’s segments include Network Enablement (NE), Service Enablement (SE), and Optical Security and Performance Products (OSP). The NE segment provides testing solutions that access the network to perform build-out and maintenance tasks. The SE segment offers solutions, which are embedded systems that yield network, service and application performance data. The OSP segment provides optical security solutions. The OSP segment’s security offerings for the currency market include Optically Variable Pigment (OVP), Optically Variable Magnetic Pigment (OVMP) and banknote thread substrates.

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