Analyzing Lumentum (NASDAQ:LITE) and Belden (NYSE:BDC)

Belden (NYSE:BDC) and Lumentum (NASDAQ:LITE) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Profitability

This table compares Belden and Lumentum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Belden	8.52%	25.00%	9.24%
Lumentum	-230.15%	26.34%	10.25%

Risk and Volatility

Belden has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Lumentum has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.

Insider & Institutional Ownership

98.8% of Belden shares are held by institutional investors. Comparatively, 94.1% of Lumentum shares are held by institutional investors. 1.1% of Belden shares are held by insiders. Comparatively, 0.4% of Lumentum shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Belden and Lumentum, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Belden	0	1	4	2	3.14
Lumentum	0	7	14	0	2.67

Belden presently has a consensus target price of $156.25, indicating a potential upside of 14.71%. Lumentum has a consensus target price of $1,044.67, indicating a potential upside of 12.80%. Given Belden’s stronger consensus rating and higher probable upside, equities analysts clearly believe Belden is more favorable than Lumentum.

Valuation & Earnings

This table compares Belden and Lumentum”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Belden	$2.72 billion	1.96	$237.52 million	$6.15	22.15
Lumentum	$3.01 billion	23.91	$25.90 million	($82.21)	-11.27

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

Summary

Belden beats Lumentum on 9 of the 15 factors compared between the two stocks.

About Belden

Belden Inc. designs, manufactures, and markets a portfolio of signal transmission solutions for mission critical applications in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It operates in two segments, Enterprise Solutions and Industrial Automation Solutions. The Enterprise Solutions segment offers copper cable and connectivity solutions, fiber cable and connectivity solutions, interconnect panels, racks and enclosures, and signal extension and matrix switching systems for use in applications, such as local area networks, data centers, access control, 5G, fiber to the home, and building automation. It also provides power, cooling, and airflow management products for mission-critical data center operations; and end-to-end fiber and copper network systems. This segment serves commercial real estate, education, financial, stadiums and venues, military installations, and broadband and wireless service providers, as well as data centers, governments, healthcare, and hospitality sectors. The Industrial Automation Solutions segment offers network infrastructure and digitization solutions; secure networks for the digitization and automation of industries and infrastructure; and products and solutions covering various aspects of data handling, including acquisition, transmission, orchestration, and management for applications in discrete automation, process automation, energy, and mass transit. It sells its products to distributors, end-users, installers, and original equipment manufacturers (OEMs). The company was formerly known as Belden CDT Inc. and changed its name to Belden Inc. in May 2007. Belden Inc. was founded in 1902 and is headquartered in Saint Louis, Missouri.

About Lumentum

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates through two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables. It offers tunable transponders, transceivers, and transmitter modules; tunable lasers, receivers, and modulators; transport products, such as reconfigurable optical add/drop multiplexers, amplifiers, and optical channel monitors, as well as components, including 980nm, multi-mode, and Raman pumps; and switches, attenuators, photodetectors, gain flattening filters, isolators, wavelength-division multiplexing filters, arrayed waveguide gratings, multiplex/de-multiplexers, and integrated passive modules. This segment also provides Super Transport Blade, which integrates optical transport functions into a single-slot blade; vertical-cavity surface-emitting lasers; directly modulated and electro-absorption modulated lasers; and laser illumination sources for 3D sensing systems. It serves customers in telecommunications, data communications, and consumer and industrial markets. The Commercial Lasers segment offers diode-pumped solid-state, fiber, diode, direct-diode, and gas lasers, such as argon-ion and helium-neon lasers for use in original equipment manufacturer applications. It serves customers in markets and applications, such as sheet metal processing, general manufacturing, biotechnology, solar cell processing, graphics and imaging, remote sensing, and precision machining. Lumentum Holdings Inc. was incorporated in 2015 and is headquartered in San Jose, California.