DSP Group (DSPG) & Harris (HRS) Critical Survey

DSP Group (NASDAQ: DSPG) and Harris (NYSE:HRS) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Dividends

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Harris pays an annual dividend of $2.28 per share and has a dividend yield of 1.5%. DSP Group does not pay a dividend. Harris pays out 53.9% of its earnings in the form of a dividend. Harris has increased its dividend for 16 consecutive years.

Valuation and Earnings

This table compares DSP Group and Harris’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DSP Group $124.75 million 2.17 -$3.00 million ($0.15) -79.33
Harris $5.90 billion 3.16 $553.00 million $4.23 37.16

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

Profitability

This table compares DSP Group and Harris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DSP Group -2.41% 2.71% 2.14%
Harris 8.63% 24.49% 7.04%

Risk and Volatility

DSP Group has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Harris has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Institutional and Insider Ownership

77.9% of DSP Group shares are owned by institutional investors. Comparatively, 84.9% of Harris shares are owned by institutional investors. 5.2% of DSP Group shares are owned by insiders. Comparatively, 1.9% of Harris shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for DSP Group and Harris, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DSP Group 0 2 4 0 2.67
Harris 0 1 5 0 2.83

DSP Group presently has a consensus price target of $15.00, indicating a potential upside of 26.05%. Harris has a consensus price target of $152.83, indicating a potential downside of 2.77%. Given DSP Group’s higher probable upside, equities analysts clearly believe DSP Group is more favorable than Harris.

Summary

Harris beats DSP Group on 14 of the 17 factors compared between the two stocks.

DSP Group Company Profile

DSP Group, Inc. is a global provider of wireless and audio chipset solutions for converged communications. Delivering semiconductor system solutions with software and hardware reference designs, the Company enables original equipment manufacturers, original design manufacturers, consumer electronics manufacturers and service providers to develop new products. Its segments include Home, Office and Mobile. The Home segment includes wireless chipset solutions for converged communication at home. The Office segment offers solution for Voice-over-Internet protocol (VoIP) office products, including office solutions that provide businesses with VoIP terminals with converged voice and data applications. The Mobile segment offers products for the mobile market that provides voice enhancement, always-on and far-end noise elimination targeted for mobile phone and mobile headsets and wearable devices that incorporate its noise suppression and voice quality enhancement HDClear technology.

Harris Company Profile

Harris Corporation provides technology-based solutions that solve government and commercial customers' mission-critical challenges in the United States and internationally. The company operates in three segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems. It designs, develops, and manufactures radio communications products and systems, including single channel ground and airborne radio systems, 2-channel vehicular radio systems, multiband manpack and handheld radios, multi-channel manpack and airborne radios, and single-channel airborne radios, as well as wideband rifleman team, ground, and high frequency manpack radios. The company also offers secure communications systems and equipment, including Internet protocol based voice and data communications systems, as well as single-band land mobile radio terminals and multiband radios comprising a handheld radio and a full-spectrum mobile radio for vehicles. In addition, it provides earth observation, environmental, exploration, geospatial, space protection, and intelligence solutions, such as sensors and payloads, as well as ground processing and information analytics for security, defense, civil, and commercial customers; and positioning, navigation, and timing products, systems, and solutions. Further, the company offers electronic warfare, avionics, surveillance and reconnaissance, command, control, communications, computers and intelligence, and undersea systems and solutions for aviation, defense, and maritime applications. Additionally, it provides managed services that support air traffic management; engineering support and sustainment for ground-based systems; and information technology and engineering managed services to government and commercial customers. The company was founded in 1895 and is headquartered in Melbourne, Florida.

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