Analyzing AudioCodes (NASDAQ:AUDC) and Ituran Location and Control (NASDAQ:ITRN)

Ituran Location and Control (NASDAQ:ITRN) and AudioCodes (NASDAQ:AUDC) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.

Dividends

Ituran Location and Control pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. AudioCodes pays an annual dividend of $0.40 per share and has a dividend yield of 3.5%. Ituran Location and Control pays out 61.7% of its earnings in the form of a dividend. AudioCodes pays out 153.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ituran Location and Control has raised its dividend for 4 consecutive years. Ituran Location and Control is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ituran Location and Control and AudioCodes, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ituran Location and Control	0	1	4	0	2.80
AudioCodes	0	1	0	0	2.00

Ituran Location and Control presently has a consensus target price of $60.67, indicating a potential upside of 19.31%. Given Ituran Location and Control’s stronger consensus rating and higher possible upside, analysts plainly believe Ituran Location and Control is more favorable than AudioCodes.

Volatility and Risk

Ituran Location and Control has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, AudioCodes has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Earnings and Valuation

This table compares Ituran Location and Control and AudioCodes”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ituran Location and Control	$359.02 million	2.82	$57.97 million	$3.24	15.69
AudioCodes	$249.25 million	1.10	$8.95 million	$0.26	43.65

Ituran Location and Control has higher revenue and earnings than AudioCodes. Ituran Location and Control is trading at a lower price-to-earnings ratio than AudioCodes, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

94.8% of Ituran Location and Control shares are held by institutional investors. Comparatively, 68.1% of AudioCodes shares are held by institutional investors. 0.0% of Ituran Location and Control shares are held by company insiders. Comparatively, 48.8% of AudioCodes shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Ituran Location and Control and AudioCodes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ituran Location and Control	16.28%	29.03%	16.29%
AudioCodes	2.83%	6.79%	3.45%

Summary

Ituran Location and Control beats AudioCodes on 14 of the 17 factors compared between the two stocks.

About Ituran Location and Control

Ituran Location and Control Ltd., together with its subsidiaries, provides location based telematics services and machine-to-machine telematics products. It operates through two segments, Telematics Services and Telematics Products. The Telematics services segment offers stolen vehicle recovery and tracking services, which enables to locate, track, and recover stolen vehicles for its subscribers; fleet management services that enable corporate and individual customers to track and manage their vehicles in real time; and locator services that allow customers to protect valuable merchandise and equipment. This segment also delivers on-demand navigation guidance, information, and assistance, including the provision of traffic reports and directions, as well as information on the location of gas stations, car repair shops, post offices, hospitals, and other facilities; and Connected Car, a service platform that includes a back-office application, a telematics device installed in the vehicle, mobile apps for IOS and Android users, and interface using the car infotainment screen, as well as usage based insurance and auto financing services. This segment serves insurance companies and agents, car manufacturers, dealers and importers, cooperative sales channels, and private subscribers. The Telematics Products segment offers Base Site, a radio receiver that includes a processor and a data computation unit to collect and send data to and from transponders, and to control centers; Control Center, a center consisting of software used to collect data from various base sites, conduct location calculations, and transmit location data to various customers and law enforcement agencies; navigation and tracking devices installed in vehicles; and SMART, a portable transmitter installed in vehicles that sends a signal to the base site enabling the location of vehicles, equipment, or an individual. The company was incorporated in 1994 and is headquartered in Azor, Israel.

About AudioCodes

AudioCodes Ltd. provides advanced communications software, products, and productivity solutions for the digital workplace worldwide. The company offers solutions, products, and services for unified communications, contact centers, hosted business services, Voice.AI, and service provider businesses. Its products include session border controllers, life cycle management solutions, VoIP network routing solutions, media gateways and servers, multi-service business routers, IP phones solutions, and value-added applications, as well as professional services. The company also offers One Voice Operations Center, a voice network management solution; Device Manager for administering business phones and meeting room solutions; AudioCodes Routing Manager for handling call routing in VoIP networks; and User Management Pack 365 simplifies user lifecycle and identity management across Microsoft Teams and Skype for Business deployments. In addition, it provides AudioCodes Live for Microsoft Teams, a portfolio of managed services for simplifying Teams adoption; appliances for Microsoft Skype/Teams for Business, such as survivable branch appliances, CCE, and CloudBond 365; and a range of value-added voice applications comprising SmartTAP, Voca, VoiceAI Connect, and Meeting Insights. Further, the company offers managed services; and AudioCodes Live Platform is a SaaS solution that enables service providers to offer their business customers a seamless migration to uCaaS solutions, such as Microsoft Teams and Zoom Phone. It primarily markets and sells its products through a direct sales force and sales representatives to original equipment manufacturers, network equipment providers, and systems integrators, enterprises, carriers, and distributors in the telecommunications and networking industries. AudioCodes Ltd. was incorporated in 1992 and is headquartered in Lod, Israel.