Applied Optoelectronics (NASDAQ: AAOI) and ADTRAN (NASDAQ:ADTN) are both small-cap technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.


ADTRAN pays an annual dividend of $0.36 per share and has a dividend yield of 2.2%. Applied Optoelectronics does not pay a dividend. ADTRAN pays out 72.0% of its earnings in the form of a dividend.


This table compares Applied Optoelectronics and ADTRAN’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Optoelectronics 21.29% 32.35% 23.92%
ADTRAN 3.58% 7.95% 5.80%

Risk & Volatility

Applied Optoelectronics has a beta of 2.51, indicating that its share price is 151% more volatile than the S&P 500. Comparatively, ADTRAN has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Applied Optoelectronics and ADTRAN, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 3 4 3 2 2.33
ADTRAN 0 3 4 0 2.57

Applied Optoelectronics currently has a consensus target price of $49.00, indicating a potential upside of 66.05%. ADTRAN has a consensus target price of $20.75, indicating a potential upside of 26.52%. Given Applied Optoelectronics’ higher possible upside, research analysts plainly believe Applied Optoelectronics is more favorable than ADTRAN.

Earnings & Valuation

This table compares Applied Optoelectronics and ADTRAN’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Optoelectronics $260.71 million 2.19 $31.23 million $4.19 7.04
ADTRAN $666.58 million 1.18 $23.83 million $0.50 32.80

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

Institutional & Insider Ownership

74.3% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 88.6% of ADTRAN shares are held by institutional investors. 8.2% of Applied Optoelectronics shares are held by insiders. Comparatively, 3.0% of ADTRAN shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.


Applied Optoelectronics beats ADTRAN on 11 of the 17 factors compared between the two stocks.

About Applied Optoelectronics

Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products, primarily for networking end markets, such as Internet data center, cable television (CATV), fiber-to-the-home (FTTH) and telecommunications (telecom). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. To Internet-based data center operators, it supplies optical transceivers that plug into switches and servers within the data center and allow these network devices to send and receive data over fiber optic cables. The Company supplies a range of products, including lasers, transmitters and transceivers, and turnkey equipment, to the CATV market. The Company designs, manufactures and integrates its own analog and digital lasers using a combination of Metal Organic Chemical Vapor Deposition (MOCVD) and its Molecular Beam Epitaxy (MBE) fabrication process.


ADTRAN, Inc. (ADTRAN) is a provider of networking and communications equipment. The Company’s solutions enable voice, data, video and Internet communications across a range of network infrastructures. It operates through two segments: Network Solutions and Services & Support. Network Solutions includes software and hardware products that enable CSPs and enterprise customers to realize a fully connected world. It provides a full-range of network implementation, maintenance and managed services. Its solutions include Access & Aggregation, Customer Devices, and Traditional & Other Products. Its Access & Aggregation solutions are used by communications service providers (CSPs) to connect their network infrastructure to their subscribers. The portfolio of ADTRAN solutions within Access & Aggregation category includes a range of modular or fixed physical form factors designed to deliver the technology and economic fit based on the target subscriber density and environmental conditions.

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