Reviewing Sierra Wireless (SWIR) and Alcatel Lucent (ALU)

Sierra Wireless (NASDAQ: SWIR) and Alcatel Lucent (NYSE:ALU) are both technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Risk and Volatility

Sierra Wireless has a beta of 3.17, meaning that its stock price is 217% more volatile than the S&P 500. Comparatively, Alcatel Lucent has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sierra Wireless and Alcatel Lucent’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sierra Wireless $615.61 million 1.16 $15.38 million $0.71 28.03
Alcatel Lucent N/A N/A N/A $0.08 43.25

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

Insider & Institutional Ownership

21.0% of Sierra Wireless shares are held by institutional investors. 2.0% of Sierra Wireless shares are held by company 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Sierra Wireless 3.48% 9.32% 6.03%
Alcatel Lucent 14.83% 86.14% 10.96%

Analyst Ratings

This is a summary of recent ratings for Sierra Wireless and Alcatel Lucent, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sierra Wireless 0 9 3 0 2.25
Alcatel Lucent 0 0 0 0 N/A

Sierra Wireless currently has a consensus target price of $26.30, indicating a potential upside of 32.16%. Given Sierra Wireless’ higher probable upside, research analysts plainly believe Sierra Wireless is more favorable than Alcatel Lucent.

Summary

Sierra Wireless beats Alcatel Lucent on 7 of the 11 factors compared between the two stocks.

Sierra Wireless Company Profile

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.

Alcatel Lucent Company Profile

Alcatel Lucent SA is a provider of Internet protocol (IP) networking, ultra-broadband access and cloud technology solutions. The Company operates through two segments for the networks business. The Ultra Broadband Networks segment consists of Mobile Networks and Fixed Networks business groups. The IP Networks and Applications segment consists of Internet protocol (IP)/Optical Networks and Applications and Analytics business groups. Its other segment consists of businesses run as separate operations (Alcatel Submarine Networks and Radio Frequency Systems (RFS)). The Company offers a range of solutions, including Communications and collaboration, IP Core Routing, IP/optical integration, long term evolution (LTE) Ultra-Broadband, Software-defined networking and Vplus. The Company offers a range of consulting, managed, maintenance and professional services, including Bell Labs Consulting and Build, Operate and Manage (BOM) Solution for Mobility Networks. The main shareholder is Nokia.

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