West Corporation (WSTC) and Oclaro (OCLR) Financial Analysis
West Corporation (NASDAQ: WSTC) and Oclaro (NASDAQ:OCLR) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.
Earnings & Valuation
This table compares West Corporation and Oclaro’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|West Corporation||$2.29 billion||0.85||$636.33 million||$2.51||9.31|
|Oclaro||$600.97 million||2.46||$140.44 million||$0.75||11.69|
West Corporation has higher revenue and earnings than Oclaro. West Corporation is trading at a lower price-to-earnings ratio than Oclaro, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and target prices for West Corporation and Oclaro, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
West Corporation currently has a consensus price target of $24.50, indicating a potential upside of 4.79%. Oclaro has a consensus price target of $13.27, indicating a potential upside of 51.32%. Given Oclaro’s stronger consensus rating and higher possible upside, analysts plainly believe Oclaro is more favorable than West Corporation.
This table compares West Corporation and Oclaro’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
West Corporation has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500. Comparatively, Oclaro has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.
Institutional and Insider Ownership
67.4% of West Corporation shares are held by institutional investors. Comparatively, 70.5% of Oclaro shares are held by institutional investors. 4.6% of West Corporation shares are held by insiders. Comparatively, 2.3% of Oclaro shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
West Corporation pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. Oclaro does not pay a dividend. West Corporation pays out 17.9% of its earnings in the form of a dividend.
Oclaro beats West Corporation on 12 of the 17 factors compared between the two stocks.
About West Corporation
West Corporation is a provider of communication and network infrastructure services. The Company helps its clients communicate, collaborate and connect with their audiences through a portfolio of solutions that include unified communications services, safety services, and interactive services, such as automated notifications, specialized agent services and telecom services. The Company’s segments include Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes carrier services, government solutions and advanced services; Interactive Services, including outbound (proactive notifications-voice, text/short messaging service (SMS) and chat), inbound speech solutions (interactive voice response or IVR), Web, mobile and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation.
Oclaro, Inc. is a provider of optical components, modules and subsystems for the core optical transport, service provider, enterprise and data center markets. The Company provides various solutions for optical networks and interconnects driving the next wave of streaming video, cloud computing, application virtualization and other bandwidth-intensive and high-speed applications. The Company’s product offerings include client side transceivers, line side transceivers, tunable laser transmitters, lithium niobate modulators, transponder modules, and discrete lasers and receivers. It designs, manufactures and markets optical components, modules and subsystems that generate, detect, combine and separate light signals in optical communications networks. The Company supplies transmission products at the component level and the module level into 10 gigabits per second (Gb/s), 40 Gb/s and 100 Gb/s communications solutions.
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