Viavi Solutions (VIAV) and Brocade Communications Systems (BRCD) Critical Analysis
Viavi Solutions (NASDAQ: VIAV) and Brocade Communications Systems (NASDAQ:BRCD) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.
This is a breakdown of current ratings and price targets for Viavi Solutions and Brocade Communications Systems, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Brocade Communications Systems||1||3||0||0||1.75|
Brocade Communications Systems pays an annual dividend of $0.22 per share and has a dividend yield of 1.7%. Viavi Solutions does not pay a dividend. Brocade Communications Systems pays out 314.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation & Earnings
This table compares Viavi Solutions and Brocade Communications Systems’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Viavi Solutions||$811.40 million||2.47||$166.90 million||$0.36||24.50|
|Brocade Communications Systems||$2.35 billion||2.24||$213.81 million||$0.07||181.29|
Brocade Communications Systems has higher revenue and earnings than Viavi Solutions. Viavi Solutions is trading at a lower price-to-earnings ratio than Brocade Communications Systems, indicating that it is currently the more affordable of the two stocks.
This table compares Viavi Solutions and Brocade Communications Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Brocade Communications Systems||-3.56%||-3.07%||-1.62%|
Volatility and Risk
Viavi Solutions has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Brocade Communications Systems has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.
Institutional and Insider Ownership
92.4% of Viavi Solutions shares are held by institutional investors. Comparatively, 83.7% of Brocade Communications Systems shares are held by institutional investors. 0.6% of Viavi Solutions shares are held by insiders. Comparatively, 1.8% of Brocade Communications Systems shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Viavi Solutions beats Brocade Communications Systems on 11 of the 16 factors compared between the two stocks.
Viavi Solutions Company Profile
Viavi Solutions Inc. (Viavi) is a provider of network test, monitoring and assurance solutions to communications service providers, enterprises and their ecosystems. The Company also offers thin film optical coatings, providing light management solutions to anti-counterfeiting, consumer and industrial, government and healthcare and other markets. The Company’s segments include Network Enablement (NE), Service Enablement (SE), and Optical Security and Performance Products (OSP). The NE segment provides testing solutions that access the network to perform build-out and maintenance tasks. The SE segment offers solutions, which are embedded systems that yield network, service and application performance data. The OSP segment provides optical security solutions. The OSP segment’s security offerings for the currency market include Optically Variable Pigment (OVP), Optically Variable Magnetic Pigment (OVMP) and banknote thread substrates.
Brocade Communications Systems Company Profile
Brocade Communications Systems, Inc. (Brocade) is a supplier of networking hardware, software and services, including storage area networking (SAN) solutions and Internet protocol (IP) networking solutions for businesses and organizations of various types and sizes. The Company operates through three segments: SAN Products, IP Networking Products and Global Services. The SAN Products segment includes infrastructure products and solutions that help customers develop and deploy storage and server consolidation, disaster recovery and data security. The IP Networking Products segment includes Layer 2 and Layer 3 Ethernet switches, and routers to connect users over private and public networks. The Global Services segment includes break or fix maintenance, installation, consulting, network management and software maintenance, and post-contract customer support. Its products enable customers to deploy architectures and technologies, including virtualization and cloud computing.
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