Fusion-IO (NYSE: FIO) and HP (NYSE:HPQ) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Dividends

HP pays an annual dividend of $0.53 per share and has a dividend yield of 2.4%. Fusion-IO does not pay a dividend. HP pays out 38.4% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Fusion-IO and HP’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fusion-IO N/A N/A N/A N/A N/A
HP $50.64 billion 0.73 $4.20 billion $1.38 15.96

HP has higher revenue and earnings than Fusion-IO.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Fusion-IO and HP, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fusion-IO 0 0 0 0 N/A
HP 0 8 13 0 2.62

HP has a consensus target price of $21.43, suggesting a potential downside of 2.70%. Given HP’s higher probable upside, analysts clearly believe HP is more favorable than Fusion-IO.

Profitability

This table compares Fusion-IO and HP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fusion-IO -30.49% -26.35% -20.81%
HP 4.66% -64.93% 9.10%

Institutional & Insider Ownership

79.2% of HP shares are held by institutional investors. 0.6% of HP shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

HP beats Fusion-IO on 8 of the 10 factors compared between the two stocks.

Fusion-IO Company Profile

Fusion-io, Inc. provides solutions for enterprises, hyperscale datacenters, and small to medium enterprises (SMEs), that accelerates databases, virtualization, mission-critical applications, cloud computing, big data, and information systems. Its hardware and software platforms and solutions enable the acceleration of data and applications. It sells its solutions through a global direct sales force, original equipment manufacturers. The Company’s portfolio of storage memory products packages ioMemory hardware combined with its VSL software into a family of products suitable for direct, shared, and cached acceleration environments. Direct acceleration is provided by its ioDrive, ioScale, and ioFX enterprise grade PCIe-products that leverage flash and are placed in x86 servers or workstations to directly accelerate locally hosted applications. Its shared acceleration is provided by its ION Data Accelerator or ioControl software combined with ioMemory, VSL, and industry-standard servers.

HP Company Profile

HP Inc. is a provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses, and enterprises, including customers in the government, health and education sectors. The Company provides personal computing and other access devices, imaging and printing products, and related technologies, solutions and services. Its segments include Personal Systems, Printing and Corporate Investments. The Personal Systems segment provides Commercial personal computers (PCs), Consumer PCs, workstations, thin clients, Commercial tablets and mobility devices, retail point-of-sale systems, displays and other accessories, software, support and services for the commercial and consumer markets. The Printing segment provides consumer and commercial printer hardware, supplies, media, solutions and services, as well as scanning devices. The Corporate Investments segment includes the operations of HP Labs and certain business incubation projects.

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