Head-To-Head Comparison: West (WSTC) vs. EMCORE (NASDAQ:EMKR)

EMCORE (NASDAQ: EMKR) and West (NASDAQ:WSTC) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Institutional & Insider Ownership

78.3% of EMCORE shares are held by institutional investors. Comparatively, 67.4% of West shares are held by institutional investors. 0.8% of EMCORE shares are held by insiders. Comparatively, 4.6% of West shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

West pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. EMCORE does not pay a dividend. West pays out 17.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for EMCORE and West, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMCORE 0 2 2 0 2.50
West 0 5 0 0 2.00

EMCORE presently has a consensus target price of $9.63, indicating a potential upside of 58.57%. West has a consensus target price of $24.50, indicating a potential upside of 4.26%. Given EMCORE’s stronger consensus rating and higher possible upside, analysts plainly believe EMCORE is more favorable than West.

Profitability

This table compares EMCORE and West’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMCORE 6.70% 9.45% 7.85%
West 7.79% N/A 5.18%

Earnings and Valuation

This table compares EMCORE and West’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EMCORE $122.89 million 1.33 $8.26 million $0.31 19.58
West N/A N/A N/A $2.52 9.33

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

Summary

EMCORE beats West on 8 of the 12 factors compared between the two stocks.

About EMCORE

EMCORE Corporation is engaged in designing and manufacturing indium phosphide (InP) optical chips, components, subsystems and systems for the broadband and specialty fiber optics market. The Company focuses on linear fiber optic transmission technology. The Company operates through Fiber Optics segment. The Company provides optical components, and also end-to-end solutions for high-speed communications network infrastructures. The Company’s optical technologies are designed for cable television (CATV) and fiber-to-the-premise (FTTP) networks, telecommunications and data centers, satellite communications, aerospace and defense, wireless networks, and broadcast and professional audio/video systems. The Company’s fiber optics products enable information that is modulated on light signals to be transmitted, routed (switched) and received in communication systems and networks.

About West

West Corporation is a provider of communication and network infrastructure services. The Company helps its clients communicate, collaborate and connect with their audiences through a portfolio of solutions that include unified communications services, safety services, and interactive services, such as automated notifications, specialized agent services and telecom services. The Company’s segments include Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes carrier services, government solutions and advanced services; Interactive Services, including outbound (proactive notifications-voice, text/short messaging service (SMS) and chat), inbound speech solutions (interactive voice response or IVR), Web, mobile and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation.

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