Optical Cable (NASDAQ:OCC) & Harmonic (NASDAQ:HLIT) Head to Head Review

Optical Cable (NASDAQ:OCC) and Harmonic (NASDAQ:HLIT) are both small-cap technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Insider and Institutional Ownership

13.6% of Optical Cable shares are owned by institutional investors. Comparatively, 99.4% of Harmonic shares are owned by institutional investors. 22.4% of Optical Cable shares are owned by company insiders. Comparatively, 1.7% of Harmonic shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Optical Cable and Harmonic, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Optical Cable	0	2	0	0	2.00
Harmonic	1	3	3	0	2.29

Harmonic has a consensus price target of $17.50, suggesting a potential upside of 61.59%. Given Harmonic’s stronger consensus rating and higher possible upside, analysts clearly believe Harmonic is more favorable than Optical Cable.

Earnings and Valuation

This table compares Optical Cable and Harmonic”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Optical Cable	$73.04 million	1.58	-$1.46 million	$0.29	45.00
Harmonic	$570.80 million	2.07	-$43.31 million	($0.42)	-25.79

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

Profitability

This table compares Optical Cable and Harmonic’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%
Harmonic	-8.50%	10.91%	5.98%

Volatility and Risk

Optical Cable has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Harmonic has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

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 Harmonic

Harmonic Inc., together with its subsidiaries, provides broadband solutions worldwide. The company operates through Broadband and Video segments. The Broadband segment sells broadband access solutions and related services, including cOS software-based broadband access solutions to broadband operators; and cOS central cloud services, a subscription service for cOS customers. The Video segment sells video processing, production, and playout solutions and services to cable operators, and satellite and telco Pay-TV service providers, as well as to broadcast and media, including streaming media companies. Its video processing appliance solutions include network management and application software, and hardware products, such as encoders, video servers, high-density stream processing systems, and edge processors. This segment also provides VOS360 SaaS platform that provides both streaming and channel origination and distribution services; and software-as-a-service (SaaS) solutions, which enables the packaging and delivery of streaming services, including live streaming, VOD, catch-up TV, start-over TV, network-DVR and cloud-DVR services through HTTP streaming to various device along with dynamic and personal ad insertion. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, integration services, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing, and training, as well as SaaS-related support and deployment. It sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was incorporated in 1988 and is headquartered in San Jose, California.