Mitel Networks (NASDAQ: MITL) and QAD (NASDAQ:QADA) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for Mitel Networks and QAD, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mitel Networks 0 1 1 0 2.50
QAD 0 1 4 0 2.80

Mitel Networks presently has a consensus price target of $11.25, indicating a potential upside of 54.75%. QAD has a consensus price target of $40.67, indicating a potential upside of 7.44%. Given Mitel Networks’ higher probable upside, analysts plainly believe Mitel Networks is more favorable than QAD.

Profitability

This table compares Mitel Networks and QAD’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mitel Networks -26.71% -9.36% -2.42%
QAD -6.40% -2.05% -0.85%

Valuation & Earnings

This table compares Mitel Networks and QAD’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mitel Networks $987.60 million 0.88 -$217.30 million ($2.06) -3.53
QAD $277.97 million 2.62 -$15.45 million ($1.03) -36.75

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

Dividends

QAD pays an annual dividend of $0.22 per share and has a dividend yield of 0.6%. Mitel Networks does not pay a dividend. QAD pays out -21.4% of its earnings in the form of a dividend.

Institutional & Insider Ownership

80.1% of Mitel Networks shares are owned by institutional investors. Comparatively, 44.9% of QAD shares are owned by institutional investors. 16.5% of Mitel Networks shares are owned by company insiders. Comparatively, 44.1% of QAD shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Mitel Networks has a beta of 2.67, suggesting that its share price is 167% more volatile than the S&P 500. Comparatively, QAD has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Summary

QAD beats Mitel Networks on 11 of the 15 factors compared between the two stocks.

Mitel Networks Company Profile

Mitel Networks Corporation is a provider of business communications and collaboration software, services and solutions. The Company’s segments include Cloud and Enterprise. The Enterprise segment sells and supports products and services for premise-based customers. The Cloud segment sells and supports products that are deployed in a cloud environment. The Company’s product portfolio includes premises and cloud-based enterprise communications infrastructure products and solutions, unified communications and collaboration (UCC) and contact center applications and a range of service offerings. The Company’s Cloud Division offers a range of private, public, hybrid and mobile Software as a Service (SaaS) solutions for businesses of all sizes. This includes Unified Communications as a Service (UCaaS) solutions. Its Enterprise Division portfolio integrates voice, UCC applications, and contact center applications on fixed and mobile networks across a range of end user devices.

QAD Company Profile

QAD Inc. (QAD) is a provider of vertically oriented enterprise software solutions for global manufacturing companies across the automotive, life sciences, consumer products, food and beverage, high technology and industrial products industries. QAD Enterprise Applications enables measurement and control of business processes and supports operational requirements, including financials, manufacturing, demand and supply chain planning, customer management, business intelligence and business process management. QAD delivers components of its solution for a range of mobile platforms. The Company’s mobile suite includes a requisition approval solution, a mobile business intelligence solution, mobile browse capability and mobile application monitoring tools to support system administrators. Its mobile browse capability allows users to view, filter and sort data accessible through QAD Browses within QAD Enterprise Applications using mobile devices.

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