InterDigital (IDCC) & Its Competitors Head to Head Review

InterDigital (NASDAQ:IDCC) is one of 955 public companies in the “Software” industry, but how does it contrast to its rivals? We will compare InterDigital to related businesses based on the strength of its risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

99.8% of InterDigital shares are held by institutional investors. Comparatively, 42.0% of shares of all “Software” companies are held by institutional investors. 3.5% of InterDigital shares are held by company insiders. Comparatively, 19.7% of shares of all “Software” companies 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.

Risk and Volatility

InterDigital has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, InterDigital’s rivals have a beta of 1.15, suggesting that their average stock price is 15% more volatile than the S&P 500.

Earnings and Valuation

This table compares InterDigital and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
InterDigital	$788.50 million	$406.64 million	38.55
InterDigital Competitors	$1.87 billion	$383.51 million	112.31

InterDigital’s rivals have higher revenue, but lower earnings than InterDigital. InterDigital is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

InterDigital pays an annual dividend of $3.00 per share and has a dividend yield of 0.9%. InterDigital pays out 34.6% of its earnings in the form of a dividend. As a group, “Software” companies pay a dividend yield of 2.0% and pay out 50.4% of their earnings in the form of a dividend. InterDigital has raised its dividend for 3 consecutive years.

Profitability

This table compares InterDigital and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
InterDigital	38.32%	28.17%	15.00%
InterDigital Competitors	-630.58%	17.61%	-8.96%

Analyst Recommendations

This is a breakdown of recent recommendations for InterDigital and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
InterDigital	0	1	3	0	2.75
InterDigital Competitors	5710	21462	44701	1489	2.57

InterDigital presently has a consensus price target of $450.00, indicating a potential upside of 34.62%. As a group, “Software” companies have a potential upside of 26.44%. Given InterDigital’s stronger consensus rating and higher possible upside, equities research analysts plainly believe InterDigital is more favorable than its rivals.

Summary

InterDigital beats its rivals on 10 of the 15 factors compared.

InterDigital Company Profile

InterDigital, Inc. operates as a global research and development company with focus primarily on wireless, visual, artificial intelligence (AI), and related technologies. The company engages in the design and development of technologies that enable connected in a range of communications and entertainment products and services, which are licensed to companies providing such products and services, including makers of wireless communications, consumer electronics, IoT devices, and cars and other motor vehicles, as well as providers of cloud-based services, such as video streaming. It designs and develops a range of innovations for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company also develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G, 5G, advanced and 6G, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. In addition, it provides video coding and transmission technologies; and engages in the research and development of artificial intelligence and machine learning solutions. Further, the company's patented technologies are used in various products that include smartphones, tablets, consumer electronics, and base stations; televisions, laptops, gaming consoles, set-top boxes, streaming devices, and connected automobiles. InterDigital, Inc. was incorporated in 1972 and is headquartered in Wilmington, Delaware.