Sierra Wireless (NASDAQ: SWIR) and Harris Corporation (NYSE:HRS) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Insider & Institutional Ownership

25.0% of Sierra Wireless shares are held by institutional investors. Comparatively, 85.0% of Harris Corporation shares are held by institutional investors. 2.0% of Sierra Wireless shares are held by company insiders. Comparatively, 1.9% of Harris Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Sierra Wireless and Harris Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sierra Wireless 3.13% 9.16% 5.84%
Harris Corporation 8.53% 23.49% 6.35%

Earnings & Valuation

This table compares Sierra Wireless and Harris Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sierra Wireless $651.88 million 1.08 $42.36 million $0.62 35.48
Harris Corporation $5.90 billion 2.74 $1.40 billion $4.43 30.67

Harris Corporation has higher revenue and earnings than Sierra Wireless. Harris Corporation is trading at a lower price-to-earnings ratio than Sierra Wireless, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Sierra Wireless and Harris Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sierra Wireless 0 8 2 0 2.20
Harris Corporation 0 1 5 0 2.83

Sierra Wireless currently has a consensus price target of $26.28, indicating a potential upside of 19.46%. Harris Corporation has a consensus price target of $130.67, indicating a potential downside of 3.82%. Given Sierra Wireless’ higher probable upside, equities analysts plainly believe Sierra Wireless is more favorable than Harris Corporation.

Risk & Volatility

Sierra Wireless has a beta of 3.14, suggesting that its stock price is 214% more volatile than the S&P 500. Comparatively, Harris Corporation has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Dividends

Harris Corporation pays an annual dividend of $2.28 per share and has a dividend yield of 1.7%. Sierra Wireless does not pay a dividend. Harris Corporation pays out 51.5% of its earnings in the form of a dividend. Harris Corporation has increased its dividend for 15 consecutive years.

Summary

Harris Corporation beats Sierra Wireless on 12 of the 17 factors compared between the two stocks.

About Sierra Wireless

Sierra Wireless, Inc. is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s OEM Solution segment offers cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. The Company’s Enterprise Solution segment offers intelligent routers and gateways, including management tools and applications that enable cellular connectivity. The Company’s Cloud and Connectivity Services segment offers a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments. The Company offers a portfolio of second generation, third generation, and fourth generation cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises.

About Harris Corporation

Harris Corporation is a technology company that provides products, systems and services that have defense and civil government applications, as well as commercial applications. It offers its products and services to government and commercial customer. It operates in four segments: Communication Systems, which serves markets in tactical communications and defense, and public safety networks; Space and Intelligence Systems, which provides complete Earth observation, environmental, geospatial, space protection, and intelligence solutions from advanced sensors and payloads, as well as ground processing and information analytics; Electronic Systems, which offers a portfolio of solutions in electronic warfare, avionics, wireless and technology, among others, and Critical Networks, which provides managed services supporting air traffic management, energy and maritime communications, and ground network operation and sustainment, as well as information technology (IT) and engineering services.

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