Head to Head Review: Ciena (NYSE:CIEN) & ZTE (OTCMKTS:ZTCOY)

ZTE (OTCMKTS:ZTCOY) and Ciena (NYSE:CIEN) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Risk & Volatility

ZTE has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Ciena has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Profitability

This table compares ZTE and Ciena’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ZTE	5.89%	13.25%	4.04%
Ciena	7.87%	18.15%	8.63%

Institutional and Insider Ownership

92.0% of Ciena shares are owned by institutional investors. 0.6% of Ciena shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ZTE and Ciena, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZTE	0	0	0	0	0.00
Ciena	0	7	13	0	2.65

Ciena has a consensus price target of $530.56, indicating a potential upside of 23.69%. Given Ciena’s stronger consensus rating and higher possible upside, analysts plainly believe Ciena is more favorable than ZTE.

Valuation and Earnings

This table compares ZTE and Ciena”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZTE	$17.75 billion	0.53	$1.06 billion	$0.47	8.60
Ciena	$4.77 billion	12.73	$123.34 million	$3.00	142.97

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

Summary

Ciena beats ZTE on 12 of the 14 factors compared between the two stocks.

About ZTE

ZTE Corporation provides integrated communication information solutions in the People's Republic of China, rest of Asia, Africa, Europe, the United States, and Oceania. It operates through three segments: Carriers' Networks, Government and Corporate Business, and Consumer Business. The Carriers' Network segment provides wireless access, wireline access, bearer systems, core networks, telecommunication software systems and services, and other technologies and product solutions for meeting carries' requirements. The Consumer Business segment offers smart phones, mobile data terminals, family terminals, and fusion terminals, as well as related software application and value-added services. The Government and Corporate Business segment focuses on providing informatization solutions for the government and corporations through the application of products, such as communications networks, Internet of Things, big data, and cloud computing. The company was founded in 1985 and is headquartered in Shenzhen, the People's Republic of China.

About Ciena

Ciena Corporation provides hardware and software services for delivery of video, data, and voice traffic metro, aggregation, and access communications network worldwide. The company’s Networking Platforms segment offers convergence of coherent optical transport, open optical networking, optical transport network switching, IP routing, and switching services. Its products include 6500 Packet-Optical Platform, Waveserver stackable interconnect system, and the 6500 Reconfigurable line system, and the 5400 family of Packet-Optical platforms, as well as 8100 coherent routing platforms; 3000 family of service delivery switches and the 5000 family of service aggregation switches, as well as 8700 Packetwave Platform and 6500 Packet Transport System. This segment also sells operating system software and enhanced software features embedded in each of its products. The company’s Blue Planet Automation Software and Services segment provides multi-domain service orchestration, inventory, route optimization and analysis, multi-cloud orchestration, and unified assurance and analytics services. Its Platform Software and Service segment offers MCP domain controller solution, and OneControl unified management system, as well as planning tools. The company’s Global Services segment provides maintenance support and training, installation and deployment, and consulting and network design services. Ciena Corporation was incorporated in 1992 and is headquartered in Hanover, Maryland.