Ruckus Wireless (NYSE: RKUS) and AT&T (NYSE:T) are both telecommunications services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Dividends

AT&T pays an annual dividend of $1.96 per share and has a dividend yield of 5.1%. Ruckus Wireless does not pay a dividend. AT&T pays out 92.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AT&T has increased its dividend for 32 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Ruckus Wireless and AT&T, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ruckus Wireless 0 0 0 0 N/A
AT&T 0 16 10 0 2.38

AT&T has a consensus target price of $44.10, indicating a potential upside of 14.55%. Given AT&T’s higher probable upside, analysts clearly believe AT&T is more favorable than Ruckus Wireless.

Earnings & Valuation

This table compares Ruckus Wireless and AT&T’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ruckus Wireless N/A N/A N/A N/A N/A
AT&T $161.93 billion 1.46 $49.37 billion $2.12 18.16

AT&T has higher revenue and earnings than Ruckus Wireless.

Insider and Institutional Ownership

55.0% of AT&T shares are held by institutional investors. 0.1% of AT&T shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Ruckus Wireless and AT&T’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ruckus Wireless -0.92% -1.17% -0.88%
AT&T 8.12% 14.53% 4.43%

Summary

AT&T beats Ruckus Wireless on 10 of the 11 factors compared between the two stocks.

About Ruckus Wireless

Ruckus Wireless, Inc. is a supplier of advanced (Wi-Fi) solutions. The Company’s solutions, which it call Smart Wi-Fi, are used by service providers and enterprises to solve a range of network capacity, coverage and reliability challenges associated with wireless traffic demands. It operates through selling controllers and access points along with related software and services segment. The Company markets and sells its products and technology through a network of channel partners to a variety of service providers and enterprises around the world. Its Smart Wi-Fi solutions offer features and functionality, such as enhanced reliability, extended range and scalability. Its products include controllers, indoor and outdoor access points, wireless bridges, controller software platforms, software management solutions, including reporting and analytics, and Wi-Fi-related cloud services, such as location-based positioning, and certificate-based security and on-boarding of Wi-Fi devices.

About AT&T

AT&T Inc. is a holding company. The Company is a provider of communications and digital entertainment services in the United States and the world. The Company operates through four segments: Business Solutions, Entertainment Group, Consumer Mobility and International. The Company offers its services and products to consumers in the United States, Mexico and Latin America and to businesses and other providers of telecommunications services worldwide. It also owns and operates three regional TV sports networks, and retains non-controlling interests in another regional sports network and a network dedicated to game-related programming, as well as Internet interactive game playing. Its services and products include wireless communications, data/broadband and Internet services, digital video services, local and long-distance telephone services, telecommunications equipment, managed networking, and wholesale services. Its subsidiaries include AT&T Mobility and SKY Brasil Servicos Ltda.

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