Ericsson (NASDAQ:ERIC) & Optical Cable (NASDAQ:OCC) Head-To-Head Contrast

Ericsson (NASDAQ:ERIC) and Optical Cable (NASDAQ:OCC) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Volatility & Risk

Ericsson has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Optical Cable has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares Ericsson and Optical Cable’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ericsson	10.72%	20.63%	7.61%
Optical Cable	3.10%	15.88%	6.17%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Ericsson and Optical Cable, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ericsson	2	5	2	0	2.00
Optical Cable	0	2	0	0	2.00

Ericsson currently has a consensus target price of $9.60, indicating a potential upside of 0.42%. Given Ericsson’s higher possible upside, equities analysts clearly believe Ericsson is more favorable than Optical Cable.

Valuation and Earnings

This table compares Ericsson and Optical Cable”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ericsson	$24.19 billion	1.33	$2.91 billion	$0.78	12.26
Optical Cable	$73.04 million	1.91	-$1.46 million	$0.29	54.48

Ericsson has higher revenue and earnings than Optical Cable. Ericsson is trading at a lower price-to-earnings ratio than Optical Cable, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

8.0% of Ericsson shares are owned by institutional investors. Comparatively, 13.6% of Optical Cable shares are owned by institutional investors. 22.4% of Optical Cable shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Ericsson beats Optical Cable on 9 of the 13 factors compared between the two stocks.

About Ericsson

Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions for telcom operators and enterprise customers in various sectors in North America, Europe, Latin America, the Middle East, Africa, North East Asia, South East Asia, Oceania, and India. It operates in four segments: Networks; Cloud Software and Services; Enterprise; and Other. The Networks segment offers radio access network (RAN) solutions for various network spectrum bands, including purpose-built and open RAN-prepared hardware and software. This segment also provides cloud RAN; transport solutions; passive and active antennas; and a range of service portfolios covering network deployment and support. The Cloud Software and Services segment offers core networks, business and operational support systems, network design and optimization, and managed network services. The Enterprise segment offers a global communications platform, including cloud-based unified communications as a service, contact center as a service, and communications platform as a service; enterprise wireless solutions comprising private wireless networks and wireless wan pre-packaged solutions; and technologies and new business solutions, such as mobile financial services, security solutions, and advertising services. The Other segment includes Redbee media that prepares and distributes live and video services for broadcasters, sports leagues, and communications service providers. It offers its services through wholesalers and distributors. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.

About Optical Cable

Optical Cable Corporation, together with its subsidiaries, engages in the manufacture and sale of fiber optic and copper data communications cabling and connectivity solutions primarily for the enterprise market in the United States and internationally. The company provides fiber optic and hybrid cables for high bandwidth transmission of data, video, and voice communications; and copper datacom cables, including unshielded and shielded twisted pair constructions. Its fiber optic connectivity products include fiber optic wall mounts, cabinet mount and rack mount enclosures, pre-terminated fiber optic enclosures, fiber optic connectors, splice trays, fiber optic jumpers, plug and play cassette modules, pre-terminated fiber optic cable assemblies, adapters, and accessories; and copper connectivity products comprising category compliant patch panels, jacks, plugs, patch cords, faceplates, surface mounted boxes, distribution and multi-media boxes, copper rack mount and wall mount enclosures, cable assemblies, cable organizers, and other wiring products for equipment rooms, telecommunications closets, data centers, and workstation applications. In addition, the company offers network, data storage, and telecommunications management systems, such as data cabinets, wall mount enclosures, horizontal and vertical cable management systems, and open frame relay racks; and datacom wiring products, including various enclosures, and modules and modular outlets for single dwelling and multiple dwelling residential uses. Further, it provides specialty fiber optic connectors and connectivity components, copper datacom connectors, and related systems and solutions for military, other harsh environment, and special applications, as well as cylindrical connector products. The company sells its products to distributors, original equipment manufacturers, value-added resellers, and end-users. Optical Cable Corporation was incorporated in 1983 and is headquartered in Roanoke, Virginia.