Ixia (XXIA) and Telefonaktiebolaget LM Ericsson (ERIC) Head to Head Review

Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) and Ixia (NASDAQ:XXIA) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

This table compares Telefonaktiebolaget LM Ericsson and Ixia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telefonaktiebolaget LM Ericsson -8.60% -5.67% -2.57%
Ixia -29.28% -28.71% -19.71%

Dividends

Telefonaktiebolaget LM Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 1.0%. Ixia does not pay a dividend. Telefonaktiebolaget LM Ericsson pays out -10.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings for Telefonaktiebolaget LM Ericsson and Ixia, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telefonaktiebolaget LM Ericsson 2 7 4 0 2.15
Ixia 0 3 1 0 2.25

Telefonaktiebolaget LM Ericsson currently has a consensus price target of $5.59, indicating a potential downside of 18.87%. Ixia has a consensus price target of $19.65, indicating a potential upside of 0.00%. Given Ixia’s stronger consensus rating and higher probable upside, analysts plainly believe Ixia is more favorable than Telefonaktiebolaget LM Ericsson.

Insider & Institutional Ownership

8.1% of Telefonaktiebolaget LM Ericsson shares are owned by institutional investors. Comparatively, 63.6% of Ixia shares are owned by institutional investors. 24.4% of Ixia shares are owned by 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.

Earnings & Valuation

This table compares Telefonaktiebolaget LM Ericsson and Ixia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telefonaktiebolaget LM Ericsson $26.02 billion 0.88 $200.60 million ($0.67) -10.28
Ixia N/A N/A N/A ($0.41) -47.93

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

Summary

Telefonaktiebolaget LM Ericsson beats Ixia on 8 of the 13 factors compared between the two stocks.

About Telefonaktiebolaget LM Ericsson

Telefonaktiebolaget LM Ericsson (Ericsson) provides infrastructure, services and software to the telecommunication industry and other sectors. The Company’s segments include Networks, IT & Cloud and Media. The Networks segment consists of two business units: Network Products and Network Services. The overall focus is on evolving and managing access networks, including the development of hardware and software for radio access and transport networks. The IT & Cloud business includes two business units: IT & Cloud Products and IT & Cloud Services. The focus in IT & Cloud is to help telecom operators and selected enterprises through the digital transformations ahead. It develops and delivers software-based solutions for television and media and combines a product portfolio that spans the television value chain, with systems integration and managed services. The portfolio includes compression, content publishing through set-top box or pure over-the-top, content delivery and analytics.

About Ixia

Ixia is a provider of physical and virtual network application performance and security resilience solutions. The Company’s product solutions consist of its hardware platforms, software applications and services, including warranty and maintenance offerings. The Company helps its customers to validate the performance and security resilience of their applications and networks. The Company offers network test hardware platforms with interchangeable interfaces, using a common set of applications and Application Programing Interfaces (APIs). The Company provides its solutions to network equipment manufacturers (NEMs), service providers, and enterprise and government organizations. The Company’s product solutions consist of its hardware platforms, such as chassis, interface cards and appliances, software application tools, and services, including its warranty and maintenance offerings and professional services.

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