Head to Head Review: Brocade Communications Systems (BRCD) vs. XG Technology (XGTI)
Brocade Communications Systems (NASDAQ: BRCD) and XG Technology (NASDAQ:XGTI) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.
Brocade Communications Systems pays an annual dividend of $0.22 per share and has a dividend yield of 1.8%. XG Technology does not pay a dividend. Brocade Communications Systems pays out 314.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility & Risk
Brocade Communications Systems has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, XG Technology has a beta of -0.83, suggesting that its stock price is 183% less volatile than the S&P 500.
This is a breakdown of recent recommendations for Brocade Communications Systems and XG Technology, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Brocade Communications Systems||1||7||0||0||1.88|
Brocade Communications Systems presently has a consensus target price of $12.45, indicating a potential upside of 4.62%. XG Technology has a consensus target price of $3.75, indicating a potential upside of 146.71%. Given XG Technology’s stronger consensus rating and higher possible upside, analysts clearly believe XG Technology is more favorable than Brocade Communications Systems.
Insider and Institutional Ownership
83.4% of Brocade Communications Systems shares are held by institutional investors. Comparatively, 2.3% of XG Technology shares are held by institutional investors. 1.8% of Brocade Communications Systems shares are held by insiders. Comparatively, 2.8% of XG Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Brocade Communications Systems and XG Technology’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Brocade Communications Systems||1.30%||5.42%||2.84%|
Earnings & Valuation
This table compares Brocade Communications Systems and XG Technology’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Brocade Communications Systems||$2.34 billion||2.10||$354.21 million||$0.07||170.00|
|XG Technology||$27.54 million||0.64||-$14.61 million||N/A||N/A|
Brocade Communications Systems has higher revenue and earnings than XG Technology.
Brocade Communications Systems beats XG Technology on 9 of the 14 factors compared between the two stocks.
About Brocade Communications Systems
Brocade Communications Systems, Inc. (Brocade) is a supplier of networking hardware, software and services, including storage area networking (SAN) solutions and Internet protocol (IP) networking solutions for businesses and organizations of various types and sizes. The Company operates through three segments: SAN Products, IP Networking Products and Global Services. The SAN Products segment includes infrastructure products and solutions that help customers develop and deploy storage and server consolidation, disaster recovery and data security. The IP Networking Products segment includes Layer 2 and Layer 3 Ethernet switches, and routers to connect users over private and public networks. The Global Services segment includes break or fix maintenance, installation, consulting, network management and software maintenance, and post-contract customer support. Its products enable customers to deploy architectures and technologies, including virtualization and cloud computing.
About XG Technology
xG Technology, Inc. develops a portfolio of intellectual property, which is embedded in its software algorithms that offer cognitive interference mitigation and spectrum access solutions for a range of applications using commercial off the shelf devices. The Company is a provider of wireless video solutions to broadcast, law enforcement and defense markets, and private mobile broadband networks for use in a range of environments. The Company markets its technology solutions across three business units: Integrated Microwave Technologies (IMT), Vislink Communication Systems and xMax. The Company offers a range of frequency-agnostic cognitive radio solutions. It focuses on various industries across the world, such as telecommunications, cable, defense and public safety, municipal governments, critical infrastructure and markets ranging from rural to urban areas and expeditionary deployments.
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