QUALCOMM (NASDAQ: QCOM) and Echostar (NASDAQ:SATS) are both mid-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Valuation and Earnings

This table compares QUALCOMM and Echostar’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QUALCOMM $22.29 billion 4.52 $2.47 billion $1.65 41.22
Echostar $3.06 billion 1.92 $179.93 million $1.24 49.56

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

Risk and Volatility

QUALCOMM has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, Echostar has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Profitability

This table compares QUALCOMM and Echostar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QUALCOMM 11.06% 18.08% 9.45%
Echostar 5.55% 2.85% 1.26%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for QUALCOMM and Echostar, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QUALCOMM 1 16 10 0 2.33
Echostar 0 1 1 0 2.50

QUALCOMM presently has a consensus price target of $67.72, indicating a potential downside of 0.44%. Echostar has a consensus price target of $70.00, indicating a potential upside of 13.90%. Given Echostar’s stronger consensus rating and higher possible upside, analysts clearly believe Echostar is more favorable than QUALCOMM.

Insider & Institutional Ownership

76.2% of QUALCOMM shares are owned by institutional investors. Comparatively, 44.5% of Echostar shares are owned by institutional investors. 0.2% of QUALCOMM shares are owned by company insiders. Comparatively, 73.5% of Echostar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

QUALCOMM pays an annual dividend of $2.28 per share and has a dividend yield of 3.4%. Echostar does not pay a dividend. QUALCOMM pays out 138.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Echostar has raised its dividend for 7 consecutive years.

Summary

QUALCOMM beats Echostar on 11 of the 17 factors compared between the two stocks.

QUALCOMM Company Profile

QUALCOMM Incorporated is engaged in the development and commercialization of a digital communication technology called code division multiple access (CDMA). The Company is engaged in the development and commercialization of the orthogonal frequency division multiple access (OFDMA) family of technologies, including long-term evolution (LTE), which is an Orthogonal Frequency Division Multiplexing (OFDM)-based standard that uses OFDMA and single-carrier Frequency Division Multiple Access (FDMA), for cellular wireless communication applications. The Company’s segments include QCT (Qualcomm CDMA Technologies), QTL (Qualcomm Technology Licensing) and QSI (Qualcomm Strategic Initiatives). The Company also develops and commercializes a range of other technologies used in handsets and tablets that contribute to end user demand. The Company’s products principally consist of integrated circuits (chips or chipsets) and system software used in mobile devices and in wireless networks.

Echostar Company Profile

EchoStar Corporation is a holding company. The Company is a provider of satellite operations, video delivery solutions, digital set-top boxes, and broadband satellite technologies and services for home and office, delivering network technologies, managed services, and solutions for enterprises and governments. The Company operates through three segments: Hughes, EchoStar Technologies (ETC) and EchoStar Satellite Services (ESS). The Company’s Hughes segment provides broadband satellite technologies and broadband services for the home and office, delivering network technologies, managed services and communication solutions to domestic and international consumers and enterprise and government customers. The ETC segment provides end-to-end video and broadcast technology products and services to businesses and directly to consumers. The ESS segment operates its business using its owned and leased in-orbit satellites. Its operations also include real estate and other activities.

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