ADTRAN (ADTN) vs. The Competition Critical Analysis

ADTRAN (NASDAQ:ADTN) is one of 110 publicly-traded companies in the “Communications Equipment” industry, but how does it compare to its peers? We will compare ADTRAN to related businesses based on the strength of its institutional ownership, valuation, profitability, earnings, analyst recommendations, dividends and risk.

Earnings and Valuation

This table compares ADTRAN and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
ADTRAN	$1.14 billion	-$45.66 million	-18.69
ADTRAN Competitors	$5.63 billion	$292.54 million	-3.17

ADTRAN’s peers have higher revenue and earnings than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

ADTRAN pays an annual dividend of $0.36 per share and has a dividend yield of 7.4%. ADTRAN pays out -138.5% of its earnings in the form of a dividend. As a group, “Communications Equipment” companies pay a dividend yield of 1.4% and pay out 43.8% of their earnings in the form of a dividend. ADTRAN is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Profitability

This table compares ADTRAN and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ADTRAN	-2.20%	17.76%	2.00%
ADTRAN Competitors	5.68%	-5.38%	3.11%

Volatility & Risk

ADTRAN has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, ADTRAN’s peers have a beta of 1.17, indicating that their average share price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for ADTRAN and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ADTRAN	1	3	3	0	2.29
ADTRAN Competitors	1078	4039	7106	383	2.54

ADTRAN currently has a consensus price target of $11.21, suggesting a potential upside of 130.62%. As a group, “Communications Equipment” companies have a potential upside of 42.32%. Given ADTRAN’s higher possible upside, research analysts plainly believe ADTRAN is more favorable than its peers.

Insider and Institutional Ownership

80.6% of ADTRAN shares are held by institutional investors. Comparatively, 44.4% of shares of all “Communications Equipment” companies are held by institutional investors. 2.2% of ADTRAN shares are held by company insiders. Comparatively, 18.4% of shares of all “Communications Equipment” companies are held by company 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.

Summary

ADTRAN peers beat ADTRAN on 9 of the 15 factors compared.

ADTRAN Company Profile

ADTRAN Holdings, Inc. is a global provider of networking and communications equipment, software, and services. Its products help communications service providers and businesses build and manage broadband and other communications networks. The company’s offerings include fiber-optic access systems, broadband access equipment, optical transport and Ethernet solutions, and cloud-managed Wi-Fi and network-management software. These products support connections between service providers’ networks and homes, businesses, and other locations.