Critical Survey: KDDI (OTCMKTS:KDDIY) versus Ceragon Networks (NASDAQ:CRNT)

Ceragon Networks (NASDAQ:CRNT) and KDDI (OTCMKTS:KDDIY) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Insider and Institutional Ownership

13.3% of Ceragon Networks shares are owned by institutional investors. Comparatively, 0.1% of KDDI shares are owned by institutional investors. 19.0% of Ceragon Networks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Ceragon Networks and KDDI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ceragon Networks	0	2	3	0	2.60
KDDI	0	1	0	0	2.00

Ceragon Networks currently has a consensus price target of $4.00, suggesting a potential upside of 69.49%. Given Ceragon Networks’ stronger consensus rating and higher possible upside, equities analysts clearly believe Ceragon Networks is more favorable than KDDI.

Profitability

This table compares Ceragon Networks and KDDI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ceragon Networks	0.38%	6.67%	3.36%
KDDI	N/A	N/A	N/A

Volatility and Risk

Ceragon Networks has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, KDDI has a beta of 0.05, meaning that its stock price is 95% less volatile than the S&P 500.

Earnings & Valuation

This table compares Ceragon Networks and KDDI”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ceragon Networks	$394.19 million	0.53	$24.06 million	$0.02	118.00
KDDI	$38.86 billion	1.63	$4.53 billion	$1.26	13.21

KDDI has higher revenue and earnings than Ceragon Networks. KDDI is trading at a lower price-to-earnings ratio than Ceragon Networks, indicating that it is currently the more affordable of the two stocks.

Summary

Ceragon Networks beats KDDI on 10 of the 14 factors compared between the two stocks.

About Ceragon Networks

Ceragon Networks Ltd., together with its subsidiaries, provides wireless transport solutions for cellular operators and other wireless service providers in North America, Europe, Africa, the Asia Pacific, the Middle East, India, and Latin America. The company's solutions use microwave and millimeter wave radio technology to transfer telecommunication traffic between base stations, small/distributed cells, and the service provider's network. It also provides IP-20 all-outdoor solutions, such as IP-20C, IP-20C-HP, IP-20S, IP-20E, and IP-20V; IP-20 split-mount, all-indoor solutions comprising IP-20N/IP-20A, IP-20F, and IP-20G; and IP-50 disaggregated solutions, including IP-50E, IP-50EX, IP-50C, IP-50CX, and IP-50FX for various short-haul, long-haul, fronthaul, small cells, routing, and enterprise access applications. In addition, the company offers network and radio planning, site surveys, solutions development, installation, network rollout, wireless transport network auditing and optimization, maintenance, training, and other services. It serves internet service providers, municipalities, government, utilities, and maritime communications broadcasters and defense, as well as oil and gas companies, public safety organizations, business and public institutions, broadcasters, energy utilities, and private communications networks. The company sells its products through direct sales, original equipment manufacturers, resellers, distributors, and system integrators. The company was formerly known as Giganet Ltd. and changed its name to Ceragon Networks Ltd. in September 2000. Ceragon Networks Ltd. was incorporated in 1996 and is headquartered in Rosh Ha'Ayin, Israel.

About KDDI

KDDI Corporation provides telecommunications services in Japan and internationally. It operates in two segments, Personal Services and Business Services. The Personal Services segment offers telecommunication services and other services such as finance, energy, and LX through its multi-brands au, UQ mobile, and povo. The Business Services segment offers smartphones and other devices, network and cloud services, and data center services to corporate customers under the TELEHOUSE brand. The company was incorporated in 1984 and is headquartered in Tokyo, Japan.