Lumentum (NASDAQ:LITE) and Optical Cable (NASDAQ:OCC) Financial Comparison

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

Institutional and Insider Ownership

13.6% of Optical Cable shares are held by institutional investors. Comparatively, 94.1% of Lumentum shares are held by institutional investors. 22.4% of Optical Cable shares are held by company insiders. Comparatively, 0.4% of Lumentum shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Optical Cable and Lumentum, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Optical Cable	0	2	0	0	2.00
Lumentum	1	5	16	1	2.74

Lumentum has a consensus target price of $1,073.25, indicating a potential downside of 1.12%. Given Lumentum’s stronger consensus rating and higher probable upside, analysts clearly believe Lumentum is more favorable than Optical Cable.

Volatility and Risk

Optical Cable has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Lumentum has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Optical Cable	3.10%	15.88%	6.17%
Lumentum	-230.15%	26.34%	10.25%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Optical Cable	$73.04 million	2.21	-$1.46 million	$0.29	62.90
Lumentum	$3.01 billion	32.30	-$6.94 billion	($82.21)	-13.20

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

Summary

Lumentum beats Optical Cable on 10 of the 15 factors compared between the two stocks.

About Optical Cable

Optical Cable Corporation, together with its subsidiaries, engages in the manufacture and sale of fiber optic and copper data communications cabling and connectivity solutions primarily for the enterprise market in the United States and internationally. The company provides fiber optic and hybrid cables for high bandwidth transmission of data, video, and voice communications; and copper datacom cables, including unshielded and shielded twisted pair constructions. Its fiber optic connectivity products include fiber optic wall mounts, cabinet mount and rack mount enclosures, pre-terminated fiber optic enclosures, fiber optic connectors, splice trays, fiber optic jumpers, plug and play cassette modules, pre-terminated fiber optic cable assemblies, adapters, and accessories; and copper connectivity products comprising category compliant patch panels, jacks, plugs, patch cords, faceplates, surface mounted boxes, distribution and multi-media boxes, copper rack mount and wall mount enclosures, cable assemblies, cable organizers, and other wiring products for equipment rooms, telecommunications closets, data centers, and workstation applications. In addition, the company offers network, data storage, and telecommunications management systems, such as data cabinets, wall mount enclosures, horizontal and vertical cable management systems, and open frame relay racks; and datacom wiring products, including various enclosures, and modules and modular outlets for single dwelling and multiple dwelling residential uses. Further, it provides specialty fiber optic connectors and connectivity components, copper datacom connectors, and related systems and solutions for military, other harsh environment, and special applications, as well as cylindrical connector products. The company sells its products to distributors, original equipment manufacturers, value-added resellers, and end-users. Optical Cable Corporation was incorporated in 1983 and is headquartered in Roanoke, Virginia.

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.