RadiSys Corporation (NASDAQ: RSYS) and EMC (NYSE:EMC) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Dividends

EMC pays an annual dividend of $0.46 per share and has a dividend yield of 1.6%. RadiSys Corporation does not pay a dividend. EMC pays out 43.0% of its earnings in the form of a dividend. EMC has raised its dividend for 3 consecutive years.

Profitability

This table compares RadiSys Corporation and EMC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RadiSys Corporation -14.38% -14.12% -5.46%
EMC 10.47% 10.66% 5.47%

Analyst Ratings

This is a breakdown of current recommendations for RadiSys Corporation and EMC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RadiSys Corporation 0 0 4 0 3.00
EMC 0 4 1 0 2.20

RadiSys Corporation currently has a consensus target price of $3.63, indicating a potential upside of 140.07%. EMC has a consensus target price of $29.00, indicating a potential downside of 0.17%. Given RadiSys Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe RadiSys Corporation is more favorable than EMC.

Institutional and Insider Ownership

57.4% of RadiSys Corporation shares are owned by institutional investors. Comparatively, 79.9% of EMC shares are owned by institutional investors. 4.9% of RadiSys Corporation shares are owned by company insiders. Comparatively, 0.4% of EMC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

RadiSys Corporation has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, EMC has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Valuation and Earnings

This table compares RadiSys Corporation and EMC’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RadiSys Corporation $168.66 million 0.35 -$8.87 million ($0.63) -2.40
EMC N/A N/A N/A $1.07 27.15

EMC has higher revenue, but lower earnings than RadiSys Corporation. RadiSys Corporation is trading at a lower price-to-earnings ratio than EMC, indicating that it is currently the more affordable of the two stocks.

RadiSys Corporation Company Profile

Radisys Corporation (Radisys) is a services acceleration company. The Company’s application aware traffic distribution platforms, real-time media processing products and wireless access technologies enable service providers to virtualize and monetize their networks. The Company’s products and services are organized into two segments: Software-Systems, and Embedded Products and Hardware Services. The Company’s Software-Systems segment consists of three product families: FlowEngine, MediaEngine and CellEngine. Also included in the Software-Systems segment is its Professional Service organization. The Company’s Embedded Products and Hardware Services segment provides customers with hardware based products targeted at the communications and healthcare markets. Products within this segment fall under primary categories, including T-Series Advanced Telecommunications Computing Architecture (ATCA) Platforms, Component Object Model (COM) Express and Rackmount Servers, and Other Products.

EMC Company Profile

EMC Corporation (EMC) develops, delivers and supports the information technology (IT) industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC manages the Company as part of a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure, Pivotal and Virtustream. EMC’s Information Infrastructure business provides a foundation for organizations to store, manage, protect, analyze and secure information. EMC’s VMware Virtual Infrastructure business is engaged in virtualization and cloud infrastructure solutions that enable businesses to help transform the way they build, deliver and consume IT resources in a manner that is based on their specific needs. EMC’s Pivotal business unites strategic technology, people and programs from EMC and VMware and has a platform that consists of data, agile development practices and a cloud independent platform-as-a-service.

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