Ericsson (NASDAQ: ERIC) and Vuzix (NASDAQ:VUZI) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.
Institutional and Insider Ownership
8.3% of Ericsson shares are held by institutional investors. Comparatively, 8.1% of Vuzix shares are held by institutional investors. 18.4% of Vuzix shares are held 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.
Ericsson has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Vuzix has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.
This is a summary of recent ratings for Ericsson and Vuzix, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ericsson currently has a consensus target price of $4.91, suggesting a potential downside of 20.89%. Vuzix has a consensus target price of $10.50, suggesting a potential upside of 94.44%. Given Vuzix’s stronger consensus rating and higher probable upside, analysts clearly believe Vuzix is more favorable than Ericsson.
This table compares Ericsson and Vuzix’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Ericsson pays an annual dividend of $0.08 per share and has a dividend yield of 1.3%. Vuzix does not pay a dividend. Ericsson pays out -17.0% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Ericsson and Vuzix’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ericsson||$23.60 billion||0.88||-$4.13 billion||($0.47)||-13.21|
|Vuzix||$5.54 million||26.61||-$19.63 million||($1.02)||-5.29|
Vuzix has lower revenue, but higher earnings than Ericsson. Ericsson is trading at a lower price-to-earnings ratio than Vuzix, indicating that it is currently the more affordable of the two stocks.
Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for networks, IT and cloud, and media markets worldwide. It operates through four segments: Networks, Digital Services, Managed Services, and Other. The Networks segment provides mobile radio access networks, transport solutions, and site solutions, as well as related services, such as network rollout, network tuning, and customer support. The Digital Services segment offers products and services for service providers in the areas of operations support systems and business support systems; packet core and communication; network functions virtualization and cloud infrastructure; application development and modernization; and consulting services. The Managed Services segment provides vendor agnostic services, including networks and IT managed, and network design and optimization services to manage service provider's networks. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.
Vuzix Corporation designs, manufactures, markets, and sells wearable display devices in the United States and internationally. The company's products are worn like eyeglasses that enable the user to view video and digital content, such as movies, computer data, the Internet, or video games. Its products include binocular wearable displays that contain two micro displays mounted in a frame attached to eyeglass-style temples or stereo headphones; monocular smart glasses products for the enterprise, industrial, and commercial markets, as well as video headphones; augmented reality products, which provide the user a live, direct or indirect, view of a physical, and real-world environment; and video viewing glasses as mobile displays for entertainment and gaming for on-the-go users, as well as support for stepping into virtual worlds, simulations, and virtual reality gaming. The company sells its products under the Vuzix brand name. Vuzix Corporation offers its products directly to consumers, as well as through specialty retailers, online retailers, distributors, resellers, and Web stores. The company was formerly known as Icuiti Corporation and changed its name to Vuzix Corporation in 2007. Vuzix Corporation was founded in 1997 and is based in West Henrietta, New York.
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