Head-To-Head Analysis: Motorola Solutions (MSI) vs. Applied Optoelectronics (AAOI)
Motorola Solutions (NYSE: MSI) and Applied Optoelectronics (NASDAQ:AAOI) are both communications & networking – nec companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.
This table compares Motorola Solutions and Applied Optoelectronics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and recommmendations for Motorola Solutions and Applied Optoelectronics, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Motorola Solutions currently has a consensus target price of $94.36, indicating a potential upside of 3.75%. Applied Optoelectronics has a consensus target price of $60.75, indicating a potential upside of 34.88%. Given Applied Optoelectronics’ higher possible upside, analysts clearly believe Applied Optoelectronics is more favorable than Motorola Solutions.
Volatility and Risk
Motorola Solutions has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, Applied Optoelectronics has a beta of 2.9, suggesting that its share price is 190% more volatile than the S&P 500.
Motorola Solutions pays an annual dividend of $1.88 per share and has a dividend yield of 2.1%. Applied Optoelectronics does not pay a dividend. Motorola Solutions pays out 48.1% of its earnings in the form of a dividend. Motorola Solutions has raised its dividend for 6 consecutive years.
Institutional and Insider Ownership
88.0% of Motorola Solutions shares are owned by institutional investors. Comparatively, 83.3% of Applied Optoelectronics shares are owned by institutional investors. 2.5% of Motorola Solutions shares are owned by insiders. Comparatively, 8.2% of Applied Optoelectronics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Motorola Solutions and Applied Optoelectronics’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Motorola Solutions||$6.04 billion||2.44||$560.00 million||$3.91||23.26|
|Applied Optoelectronics||$260.71 million||3.35||$31.23 million||$4.19||10.75|
Motorola Solutions has higher revenue and earnings than Applied Optoelectronics. Applied Optoelectronics is trading at a lower price-to-earnings ratio than Motorola Solutions, indicating that it is currently the more affordable of the two stocks.
Applied Optoelectronics beats Motorola Solutions on 10 of the 18 factors compared between the two stocks.
Motorola Solutions Company Profile
Motorola Solutions, Inc. is a provider of communication infrastructure, devices, accessories, software and services. The Company operates through two segments: Products and Services. The Company’s Products segment offers a portfolio of infrastructure, devices, accessories and software. The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers operating private communications networks and manage a mobile workforce. The Company’s Services segment provides a range of service offerings for government, public safety and commercial communication networks. The Services segment product lines include Integration services, Managed & Support services, and Integrated Digital Enhanced Network (iDEN) services.
Applied Optoelectronics Company Profile
Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products, primarily for networking end markets, such as Internet data center, cable television (CATV), fiber-to-the-home (FTTH) and telecommunications (telecom). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. To Internet-based data center operators, it supplies optical transceivers that plug into switches and servers within the data center and allow these network devices to send and receive data over fiber optic cables. The Company supplies a range of products, including lasers, transmitters and transceivers, and turnkey equipment, to the CATV market. The Company designs, manufactures and integrates its own analog and digital lasers using a combination of Metal Organic Chemical Vapor Deposition (MOCVD) and its Molecular Beam Epitaxy (MBE) fabrication process.
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