Critical Contrast: ADTRAN (NASDAQ:ADTN) and Verify Smart (OTCMKTS:VSMR)

ADTRAN (NASDAQ:ADTN) and Verify Smart (OTCMKTS:VSMR) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Risk and Volatility

ADTRAN has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Verify Smart has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ADTRAN and Verify Smart, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ADTRAN	1	2	4	0	2.43
Verify Smart	0	0	0	0	0.00

ADTRAN currently has a consensus target price of $18.00, suggesting a potential upside of 14.87%. Given ADTRAN’s stronger consensus rating and higher possible upside, analysts clearly believe ADTRAN is more favorable than Verify Smart.

Profitability

This table compares ADTRAN and Verify Smart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ADTRAN	-3.18%	10.94%	1.35%
Verify Smart	N/A	N/A	N/A

Insider & Institutional Ownership

80.6% of ADTRAN shares are owned by institutional investors. 2.2% of ADTRAN shares are owned by 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.

Valuation and Earnings

This table compares ADTRAN and Verify Smart”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ADTRAN	$1.12 billion	1.13	-$45.66 million	($0.39)	-40.18
Verify Smart	$220,000.00	43.23	N/A	N/A	N/A

Verify Smart has lower revenue, but higher earnings than ADTRAN.

Summary

ADTRAN beats Verify Smart on 8 of the 11 factors compared between the two stocks.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.

About Verify Smart

Verify Smart Corp. provides wireless software solutions focused on IP fraud protection for secure authenticated transactions and celebrity services for fans interactions worldwide. The company's software solutions are delivered as Software as a Service model over the Internet, and allows its clients to access the company's application software and databases. Its products include VerifyNGo, which provides instant personal verification to combat fraud and identity theft through mobile device; and Prvii, a mobile communications service that enables celebrities to monetize their fan base via messaging channels. Verify Smart Corp. promotes its products and services across various markets, including consumer brands, financial services, sports/entertainment, governments, and educational institutions. The company was formerly known as Treasure Explorations Inc. and changed its name to Verify Smart Corp. in March 2009. Verify Smart Corp. was founded in 2006 and is based in Fernley, Nevada.