Brocade Communications Systems (NASDAQ:BRCD) vs. Gilat Satellite Networks (GILT) Financial Review
Gilat Satellite Networks (NASDAQ: GILT) and Brocade Communications Systems (NASDAQ:BRCD) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.
Brocade Communications Systems pays an annual dividend of $0.22 per share and has a dividend yield of 1.8%. Gilat Satellite Networks does not pay a dividend. Brocade Communications Systems pays out 157.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider & Institutional Ownership
7.9% of Gilat Satellite Networks shares are owned by institutional investors. Comparatively, 82.1% of Brocade Communications Systems shares are owned by institutional investors. 1.1% of Gilat Satellite Networks shares are owned by company insiders. Comparatively, 1.8% of Brocade Communications Systems shares are owned 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.
Earnings and Valuation
This table compares Gilat Satellite Networks and Brocade Communications Systems’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Gilat Satellite Networks||$289.16 million||1.05||$25.44 million||$0.07||79.71|
|Brocade Communications Systems||$2.38 billion||2.09||$361.06 million||$0.14||86.71|
Brocade Communications Systems has higher revenue and earnings than Gilat Satellite Networks. Gilat Satellite Networks is trading at a lower price-to-earnings ratio than Brocade Communications Systems, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Gilat Satellite Networks has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Brocade Communications Systems has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.
This table compares Gilat Satellite Networks and Brocade Communications Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gilat Satellite Networks||1.27%||6.59%||3.70%|
|Brocade Communications Systems||2.54%||8.49%||4.40%|
This is a breakdown of recent ratings and target prices for Gilat Satellite Networks and Brocade Communications Systems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gilat Satellite Networks||0||0||0||0||N/A|
|Brocade Communications Systems||1||13||0||0||1.93|
Brocade Communications Systems has a consensus target price of $11.11, indicating a potential downside of 8.45%. Given Brocade Communications Systems’ higher probable upside, analysts clearly believe Brocade Communications Systems is more favorable than Gilat Satellite Networks.
Brocade Communications Systems beats Gilat Satellite Networks on 12 of the 14 factors compared between the two stocks.
About Gilat Satellite Networks
Gilat Satellite Networks Ltd. is a provider of satellite-based broadband communications. The Company operates through three segments: Commercial, Mobility and Services divisions. The Company designs and manufactures satellite ground segment and networking communications equipment, which it sells to its customers either as network components (modems, Block Up converters (BUCs), antennas) or as complete network solutions (which include hubs and related terminals and services) or turnkey projects. The equipment that the Company develops includes commercial Very Small Aperture Terminals (VSAT) systems, defense and homeland security satellite communications systems, solid-state power amplifiers (SSPAs), BUCs, low-profile antennas, on-the-Move/on-the-Pause terminals and modems. The Company’s equipment is used by satellite operators, service providers, telecommunications operators, system integrators, government and defense organizations, large corporations and enterprises.
About Brocade Communications Systems
Brocade Communications Systems, Inc. (Brocade) is a supplier of networking hardware, software and services, including storage area networking (SAN) solutions and Internet protocol (IP) networking solutions for businesses and organizations of various types and sizes. The Company operates through three segments: SAN Products, IP Networking Products and Global Services. The SAN Products segment includes infrastructure products and solutions that help customers develop and deploy storage and server consolidation, disaster recovery and data security. The IP Networking Products segment includes Layer 2 and Layer 3 Ethernet switches, and routers to connect users over private and public networks. The Global Services segment includes break or fix maintenance, installation, consulting, network management and software maintenance, and post-contract customer support. Its products enable customers to deploy architectures and technologies, including virtualization and cloud computing.
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