Alcatel Lucent (ALU) and Sierra Wireless (SWIR) Head to Head Comparison

Alcatel Lucent (NYSE: ALU) and Sierra Wireless (NASDAQ:SWIR) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Profitability

This table compares Alcatel Lucent and Sierra Wireless’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alcatel Lucent 14.83% 86.14% 10.96%
Sierra Wireless 3.48% 9.32% 6.03%

Valuation and Earnings

This table compares Alcatel Lucent and Sierra Wireless’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alcatel Lucent N/A N/A N/A $0.08 43.25
Sierra Wireless $615.61 million 1.15 $15.38 million $0.71 27.82

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

Volatility & Risk

Alcatel Lucent has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 3.17, suggesting that its stock price is 217% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Alcatel Lucent and Sierra Wireless, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alcatel Lucent 0 0 0 0 N/A
Sierra Wireless 0 9 3 0 2.25

Sierra Wireless has a consensus price target of $26.30, suggesting a potential upside of 33.16%. Given Sierra Wireless’ higher possible upside, analysts plainly believe Sierra Wireless is more favorable than Alcatel Lucent.

Insider and Institutional Ownership

21.3% of Sierra Wireless shares are owned by institutional investors. 2.0% of Sierra Wireless shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Sierra Wireless beats Alcatel Lucent on 7 of the 11 factors compared between the two stocks.

Alcatel Lucent Company Profile

Alcatel Lucent SA is a provider of Internet protocol (IP) networking, ultra-broadband access and cloud technology solutions. The Company operates through two segments for the networks business. The Ultra Broadband Networks segment consists of Mobile Networks and Fixed Networks business groups. The IP Networks and Applications segment consists of Internet protocol (IP)/Optical Networks and Applications and Analytics business groups. Its other segment consists of businesses run as separate operations (Alcatel Submarine Networks and Radio Frequency Systems (RFS)). The Company offers a range of solutions, including Communications and collaboration, IP Core Routing, IP/optical integration, long term evolution (LTE) Ultra-Broadband, Software-defined networking and Vplus. The Company offers a range of consulting, managed, maintenance and professional services, including Bell Labs Consulting and Build, Operate and Manage (BOM) Solution for Mobility Networks. The main shareholder is Nokia.

Sierra Wireless Company Profile

Sierra Wireless, Inc. is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s OEM Solution segment offers cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. The Company’s Enterprise Solution segment offers intelligent routers and gateways, including management tools and applications that enable cellular connectivity. The Company’s Cloud and Connectivity Services segment offers a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments. The Company offers a portfolio of second generation, third generation, and fourth generation cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises.

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