ViaSat (VSAT) versus Telefonaktiebolaget LM Ericsson (ERIC) Critical Review
ViaSat (NASDAQ: VSAT) and Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.
Telefonaktiebolaget LM Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 1.1%. ViaSat does not pay a dividend. Telefonaktiebolaget LM Ericsson pays out -5.6% of its earnings in the form of a dividend.
This table compares ViaSat and Telefonaktiebolaget LM Ericsson’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telefonaktiebolaget LM Ericsson||-17.57%||-11.30%||-4.81%|
This is a breakdown of current ratings and target prices for ViaSat and Telefonaktiebolaget LM Ericsson, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telefonaktiebolaget LM Ericsson||3||6||3||0||2.00|
ViaSat currently has a consensus target price of $74.11, indicating a potential upside of 5.78%. Telefonaktiebolaget LM Ericsson has a consensus target price of $5.49, indicating a potential downside of 17.57%. Given ViaSat’s stronger consensus rating and higher possible upside, equities research analysts plainly believe ViaSat is more favorable than Telefonaktiebolaget LM Ericsson.
Insider & Institutional Ownership
99.4% of ViaSat shares are owned by institutional investors. Comparatively, 8.4% of Telefonaktiebolaget LM Ericsson shares are owned by institutional investors. 7.7% of ViaSat shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares ViaSat and Telefonaktiebolaget LM Ericsson’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ViaSat||$1.56 billion||2.65||$23.76 million||($0.49)||-142.98|
|Telefonaktiebolaget LM Ericsson||$23.60 billion||0.94||-$4.13 billion||($1.24)||-5.37|
ViaSat has higher earnings, but lower revenue than Telefonaktiebolaget LM Ericsson. ViaSat is trading at a lower price-to-earnings ratio than Telefonaktiebolaget LM Ericsson, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
ViaSat has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Telefonaktiebolaget LM Ericsson has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.
ViaSat beats Telefonaktiebolaget LM Ericsson on 11 of the 16 factors compared between the two stocks.
ViaSat Company Profile
ViaSat, Inc. is engaged in broadband technologies and services. The Company operates through three segments: satellite services, commercial networks and government systems. The satellite services segment provides satellite-based broadband services to consumers, enterprises, commercial airlines and mobile broadband customers primarily in the United States. The commercial networks segment develops and produces a range of end-to-end satellite and wireless communication systems, ground networking equipment and space-to-earth connectivity systems. The government systems segment develops and produces network-centric Internet Protocol (IP)-based fixed and mobile secure government communications systems, products, services and solutions, which are designed to enable the collection and dissemination of real-time digital information between command centers, communications nodes and air defense systems.
Telefonaktiebolaget LM Ericsson Company Profile
Telefonaktiebolaget LM Ericsson (Ericsson) provides infrastructure, services and software to the telecommunication industry and other sectors. The Company’s segments include Networks, IT & Cloud and Media. The Networks segment consists of two business units: Network Products and Network Services. The overall focus is on evolving and managing access networks, including the development of hardware and software for radio access and transport networks. The IT & Cloud business includes two business units: IT & Cloud Products and IT & Cloud Services. The focus in IT & Cloud is to help telecom operators and selected enterprises through the digital transformations ahead. It develops and delivers software-based solutions for television and media and combines a product portfolio that spans the television value chain, with systems integration and managed services. The portfolio includes compression, content publishing through set-top box or pure over-the-top, content delivery and analytics.
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