Financial Contrast: ZTE (OTCMKTS:ZTCOY) and Gilat Satellite Networks (NASDAQ:GILT)

Gilat Satellite Networks (NASDAQ:GILT) and ZTE (OTCMKTS:ZTCOY) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares Gilat Satellite Networks and ZTE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gilat Satellite Networks	6.21%	10.12%	6.79%
ZTE	5.89%	13.25%	4.04%

Risk & Volatility

Gilat Satellite Networks has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, ZTE has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Insider & Institutional Ownership

35.7% of Gilat Satellite Networks shares are owned by institutional investors. 1.1% of Gilat Satellite Networks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Gilat Satellite Networks and ZTE”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gilat Satellite Networks	$451.66 million	1.66	$20.72 million	$0.44	23.11
ZTE	$17.75 billion	0.53	$1.06 billion	$0.47	8.60

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Gilat Satellite Networks and ZTE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gilat Satellite Networks	0	2	1	1	2.75
ZTE	0	0	0	0	0.00

Gilat Satellite Networks presently has a consensus target price of $20.00, indicating a potential upside of 96.66%. Given Gilat Satellite Networks’ stronger consensus rating and higher possible upside, equities analysts plainly believe Gilat Satellite Networks is more favorable than ZTE.

Summary

Gilat Satellite Networks beats ZTE on 11 of the 15 factors compared between the two stocks.

About Gilat Satellite Networks

Gilat Satellite Networks Ltd., together with its subsidiaries, provides satellite-based broadband communication solutions in Israel, the United States, Peru, and internationally. It operates in three segments: Satellite Networks, Integrated Solutions, and Network Infrastructure and Services. Its portfolio consists of cloud-based satellite network platform, very small aperture terminals, amplifiers, modems, on-the-move antennas, solid state power amplifiers, block upconverters, transceivers, and defense ground systems and field services. The company also develops, manufactures, and supplies products and solutions for mission-critical defense and broadcast satellite communications systems, advanced on-the-move and on-the-pause satellite communications equipment, systems, and solutions, including airborne, ground-mobile satellite systems and solutions; and provides terrestrial, including fiber optic and wireless network, and satellite network construction and operation services. In addition, it provides turnkey integrated solutions, including managed satellite network services, network planning and optimization, remote network operation, call center support, hub and field operations, and communication networks construction and installation services; connectivity services, internet access, and telephony services to enterprise, government, and residential customers; and builds telecommunication infrastructure using fiber-optic and wireless technologies for broadband connectivity. The company sells its products and solutions to communication service providers, satellite operators, Mobile Network Operators, and system integrators that use satellite communications to serve enterprise, social inclusion solutions, government and residential users, and defense and homeland security organizations, as well as directly to end-users. Gilat Satellite Networks Ltd. was incorporated in 1987 and is headquartered in Petah Tikva, Israel.

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.