AudioCodes (NASDAQ: AUDC) and Motorola Solutions (NYSE:MSI) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Risk & Volatility

AudioCodes has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, Motorola Solutions has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for AudioCodes and Motorola Solutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AudioCodes 0 1 2 0 2.67
Motorola Solutions 0 2 10 0 2.83

AudioCodes presently has a consensus price target of $7.75, suggesting a potential upside of 5.01%. Motorola Solutions has a consensus price target of $94.36, suggesting a potential downside of 2.28%. Given AudioCodes’ higher probable upside, equities research analysts clearly believe AudioCodes is more favorable than Motorola Solutions.

Earnings & Valuation

This table compares AudioCodes and Motorola Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AudioCodes $145.57 million 1.61 $16.23 million $0.54 13.67
Motorola Solutions $6.04 billion 2.59 $560.00 million $3.91 24.70

Motorola Solutions has higher revenue and earnings than AudioCodes. AudioCodes is trading at a lower price-to-earnings ratio than Motorola Solutions, indicating that it is currently the more affordable of the two stocks.

Dividends

Motorola Solutions pays an annual dividend of $2.08 per share and has a dividend yield of 2.2%. AudioCodes does not pay a dividend. Motorola Solutions pays out 53.2% of its earnings in the form of a dividend. Motorola Solutions has increased its dividend for 7 consecutive years.

Institutional & Insider Ownership

22.1% of AudioCodes shares are owned by institutional investors. Comparatively, 87.8% of Motorola Solutions shares are owned by institutional investors. 48.8% of AudioCodes shares are owned by insiders. Comparatively, 2.5% of Motorola Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares AudioCodes and Motorola Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AudioCodes 11.84% 8.33% 4.75%
Motorola Solutions 10.51% -92.09% 10.40%

Summary

Motorola Solutions beats AudioCodes on 12 of the 17 factors compared between the two stocks.

About AudioCodes

AudioCodes Ltd. designs, develops and sells Voice over-Internet Protocol (VoIP) and converged VoIP, and data networking solutions, products and applications that facilitate Unified Communications (UC) and Contact Center (CC) services. The Company categorizes its products and services into two main business lines: network and technology. Network products consist of customer premises equipment (CPE), gateways for the enterprise and service provider (or carrier) markets and of carrier-grade-oriented low- and mid-density media gateways for service providers and Enterprise Session Border Controls (ESBCs). Complementing its media gateways and session border gateways as network products are its multi-service business routers (MSBR), Internet Protocol (IP) phones, media servers, mobile VoIP solutions and value added application products. Technology products consist of its chips and boards business products. Its products are deployed in enterprise, service provider cloud networks.

About Motorola Solutions

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.

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