Financial Review: Oclaro (OCLR) and SUMCO Corp/ADR (SUOPY)

Oclaro (NASDAQ:OCLR) and SUMCO Corp/ADR (OTCMKTS:SUOPY) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Insider & Institutional Ownership

69.2% of Oclaro shares are owned by institutional investors. 2.0% of Oclaro shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

SUMCO Corp/ADR pays an annual dividend of $1.06 per share and has a dividend yield of 3.8%. Oclaro does not pay a dividend. SUMCO Corp/ADR pays out 64.6% of its earnings in the form of a dividend.

Risk & Volatility

Oclaro has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, SUMCO Corp/ADR has a beta of 2.36, suggesting that its share price is 136% more volatile than the S&P 500.

Profitability

This table compares Oclaro and SUMCO Corp/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oclaro 11.50% 13.34% 10.69%
SUMCO Corp/ADR 15.43% 16.05% 8.62%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Oclaro and SUMCO Corp/ADR, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oclaro 0 10 4 0 2.29
SUMCO Corp/ADR 0 0 0 0 N/A

Oclaro presently has a consensus target price of $9.39, indicating a potential upside of 9.53%. Given Oclaro’s higher probable upside, equities analysts plainly believe Oclaro is more favorable than SUMCO Corp/ADR.

Earnings & Valuation

This table compares Oclaro and SUMCO Corp/ADR’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oclaro $543.17 million 2.69 $62.45 million $0.44 19.48
SUMCO Corp/ADR $2.32 billion 1.78 $240.45 million $1.64 17.20

SUMCO Corp/ADR has higher revenue and earnings than Oclaro. SUMCO Corp/ADR is trading at a lower price-to-earnings ratio than Oclaro, indicating that it is currently the more affordable of the two stocks.

Summary

Oclaro beats SUMCO Corp/ADR on 8 of the 15 factors compared between the two stocks.

About Oclaro

Oclaro, Inc. designs, manufactures, and markets optical components, modules, and subsystems for the long-haul, metro, and data center markets worldwide. The company's products generate, detect, combine, and separate light signals in optical communications networks. It offers client side transceivers, including pluggable transceivers; line side transceivers; tunable laser transmitters, such as discrete lasers and co-packaged laser modulators; lithium niobate modulators to manipulate the phase or the amplitude of an optical signal; transponder modules for transmitter and receiver functions; and discrete lasers and receivers for metro and long-haul applications. The company markets its products through direct sales force, as well as through sales representatives and resellers. It serves network equipment manufacturers of telecommunications and datacom systems, hyperscale data center operators, and datacom module manufacturers. The company was formerly known as Bookham, Inc. and changed its name to Oclaro, Inc. in April 2009. Oclaro, Inc. was founded in 1988 and is headquartered in San Jose, California.

About SUMCO Corp/ADR

Sumco Corporation, together with its subsidiaries, manufactures and sells silicon wafers for the semiconductor industry in Japan, North America, Asia, and Europe. It provides monocrystalline ingots, as well as polished, annealed, epitaxial, junction isolated, silicon-on-insulator, and reclaimed polished wafers. The company was formerly known as Sumitomo Mitsubishi Silicon Corp. and changed its name to Sumco Corporation in August 2005. Sumco Corporation was founded in 1999 and is headquartered in Tokyo, Japan.

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