Alcatel Lucent SA (NYSE: ALU) and InterDigital (NASDAQ:IDCC) are both mid-cap technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Dividends

InterDigital pays an annual dividend of $1.40 per share and has a dividend yield of 1.8%. Alcatel Lucent SA does not pay a dividend. InterDigital pays out 15.2% of its earnings in the form of a dividend.

Insider and Institutional Ownership

71.0% of InterDigital shares are held by institutional investors. 1.9% of InterDigital shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Alcatel Lucent SA and InterDigital’s 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%
InterDigital 45.92% 44.58% 19.04%

Valuation and Earnings

This table compares Alcatel Lucent SA and InterDigital’s gross revenue, earnings per share (EPS) 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
InterDigital $712.48 million 3.70 $534.85 million $9.23 8.23

InterDigital has higher revenue and earnings than Alcatel Lucent SA.

Analyst Ratings

This is a summary of recent recommendations and price targets for Alcatel Lucent SA and InterDigital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alcatel Lucent SA 0 0 0 0 N/A
InterDigital 0 2 2 0 2.50

InterDigital has a consensus price target of $91.33, suggesting a potential upside of 20.18%. Given InterDigital’s higher possible upside, analysts plainly believe InterDigital is more favorable than Alcatel Lucent SA.

Summary

InterDigital beats Alcatel Lucent SA on 8 of the 11 factors compared between the two stocks.

Alcatel Lucent SA Company Profile

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.

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.

Receive News & Ratings for Alcatel Lucent SA Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Alcatel Lucent SA and related companies with MarketBeat.com's FREE daily email newsletter.