Infinera (NASDAQ: INFN) and TESSCO Technologies (NASDAQ:TESS) are both small-cap technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.
Institutional and Insider Ownership
90.6% of Infinera shares are owned by institutional investors. Comparatively, 58.3% of TESSCO Technologies shares are owned by institutional investors. 2.9% of Infinera shares are owned by insiders. Comparatively, 26.9% of TESSCO Technologies 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.
Volatility and Risk
Infinera has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, TESSCO Technologies has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.
This table compares Infinera and TESSCO Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Infinera and TESSCO Technologies’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Infinera||$870.14 million||1.22||-$23.92 million||($1.07)||-6.62|
|TESSCO Technologies||$533.29 million||0.33||$1.44 million||$0.34||62.50|
TESSCO Technologies has lower revenue, but higher earnings than Infinera. Infinera is trading at a lower price-to-earnings ratio than TESSCO Technologies, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for Infinera and TESSCO Technologies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Infinera presently has a consensus price target of $10.96, indicating a potential upside of 54.78%. Given Infinera’s higher probable upside, equities research analysts plainly believe Infinera is more favorable than TESSCO Technologies.
TESSCO Technologies pays an annual dividend of $0.80 per share and has a dividend yield of 3.8%. Infinera does not pay a dividend. TESSCO Technologies pays out 235.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
TESSCO Technologies beats Infinera on 8 of the 15 factors compared between the two stocks.
Infinera Company Profile
Infinera Corporation provides optical transport networking equipment, software and services to telecommunications service providers, Internet content providers (ICPs), cable providers, wholesale and enterprise carriers, research and education institutions, enterprise customers and government entities across the globe. The Company’s portfolio consists of the Infinera DTN-X Family, the Infinera DTN platform, the Infinera Cloud Xpress Family, the Infinera XTM Series, the Infinera XTG Series and the Infinera FlexILS platform, addressing long-haul, subsea and metro networks end-to-end. Its technology includes Infinera Intelligent Transport Network Architecture, Infinera Photonic Integrated Circuits, Infinera FlexCoherent Processor, Super-Channels, Sliceable Photonics, Disaggregation, Integrated Digital Switching, Infinera Instant Bandwidth, Infinera Packet-Optical Transport, Multi-layer Switching and Optimization, and Management, Control and Security.
TESSCO Technologies Company Profile
TESSCO Technologies Incorporated architects and delivers the product and value chain solutions to organizations responsible for building, operating, maintaining and reselling cellular, mobile communications, wireless-fidelity (Wi-Fi), machine-to-machine, Internet of Things and wireless backhaul systems. The Company provides marketing and sales services, knowledge and supply chain management, product-solution delivery and control systems utilizing Internet and information technology. Its customers include a diversified mix of carrier and public network operators, tower owners, program managers, contractors and integrators, wireless Internet service providers, industrial and enterprise self-maintained users (including railroads, utilities, mining operators, oil and gas operators and technicians), governments, manufacturers, value-added resellers, tier 1, 2 and 3 retail carrier stores and their independent agents, dealers and consumers, as well as other local and national retailers.
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