ARRIS International PLC (NASDAQ: ARRS) and Viavi Solutions (NASDAQ:VIAV) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Insider & Institutional Ownership

86.9% of ARRIS International PLC shares are owned by institutional investors. Comparatively, 92.4% of Viavi Solutions shares are owned by institutional investors. 0.9% of ARRIS International PLC shares are owned by company insiders. Comparatively, 0.6% of Viavi Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations for ARRIS International PLC and Viavi Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARRIS International PLC 0 2 5 0 2.71
Viavi Solutions 0 2 6 0 2.75

ARRIS International PLC currently has a consensus target price of $33.57, indicating a potential upside of 20.07%. Viavi Solutions has a consensus target price of $12.78, indicating a potential upside of 47.96%. Given Viavi Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Viavi Solutions is more favorable than ARRIS International PLC.

Profitability

This table compares ARRIS International PLC and Viavi Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARRIS International PLC 2.51% 14.02% 5.89%
Viavi Solutions 10.57% 8.99% 3.44%

Valuation & Earnings

This table compares ARRIS International PLC and Viavi Solutions’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
ARRIS International PLC $6.83 billion 0.77 $18.10 million $0.87 32.14
Viavi Solutions $811.40 million 2.43 $166.90 million $0.35 24.69

Viavi Solutions has higher revenue, but lower earnings than ARRIS International PLC. Viavi Solutions is trading at a lower price-to-earnings ratio than ARRIS International PLC, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

ARRIS International PLC has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500.

Summary

Viavi Solutions beats ARRIS International PLC on 9 of the 14 factors compared between the two stocks.

ARRIS International PLC Company Profile

ARRIS International plc is a media entertainment and data communications solutions provider. The Company operates in two segments: Customer Premises Equipment (CPE), and Network & Cloud (N&C). The Company enables service providers, including cable, telephone, and digital broadcast satellite operators, and media programmers to deliver media, voice and Internet Protocol (IP) data services to their subscribers. It is engaged in offering set-tops, digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms, and associated data and voice CPE, which it also sells directly to consumers through retail channels. Its solutions are complemented by an array of services, including technical support, repair and refurbishment, and system design and integration. The CPE segment consists of CPE Products-Video and CPE Products-Broadband. The N&C segment consists of Infrastructure Products, Cloud Software and Global Services.

Viavi Solutions Company Profile

Viavi Solutions Inc. (Viavi) is a provider of network test, monitoring and assurance solutions to communications service providers, enterprises and their ecosystems. The Company also offers thin film optical coatings, providing light management solutions to anti-counterfeiting, consumer and industrial, government and healthcare and other markets. The Company’s segments include Network Enablement (NE), Service Enablement (SE), and Optical Security and Performance Products (OSP). The NE segment provides testing solutions that access the network to perform build-out and maintenance tasks. The SE segment offers solutions, which are embedded systems that yield network, service and application performance data. The OSP segment provides optical security solutions. The OSP segment’s security offerings for the currency market include Optically Variable Pigment (OVP), Optically Variable Magnetic Pigment (OVMP) and banknote thread substrates.

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