Critical Analysis: Viavi Solutions (NASDAQ:VIAV) and Intel (NASDAQ:INTC)

Viavi Solutions (NASDAQ:VIAV) and Intel (NASDAQ:INTC) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Risk & Volatility

Viavi Solutions has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Intel has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Viavi Solutions and Intel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Viavi Solutions 2.37% 17.53% 6.96%
Intel 27.46% 28.28% 16.11%

Insider & Institutional Ownership

95.3% of Viavi Solutions shares are held by institutional investors. Comparatively, 67.2% of Intel shares are held by institutional investors. 0.9% of Viavi Solutions shares are held by company insiders. Comparatively, 0.0% of Intel shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Viavi Solutions and Intel, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viavi Solutions 0 2 6 0 2.75
Intel 8 14 17 0 2.23

Viavi Solutions currently has a consensus target price of $15.88, indicating a potential upside of 0.86%. Intel has a consensus target price of $55.71, indicating a potential downside of 4.36%. Given Viavi Solutions’ stronger consensus rating and higher possible upside, equities analysts clearly believe Viavi Solutions is more favorable than Intel.

Valuation and Earnings

This table compares Viavi Solutions and Intel’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Viavi Solutions $1.13 billion 3.20 $5.40 million $0.52 30.27
Intel $70.85 billion 3.58 $21.05 billion $4.58 12.72

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

Dividends

Intel pays an annual dividend of $1.26 per share and has a dividend yield of 2.2%. Viavi Solutions does not pay a dividend. Intel pays out 27.5% of its earnings in the form of a dividend.

Summary

Intel beats Viavi Solutions on 9 of the 16 factors compared between the two stocks.

Viavi Solutions Company Profile

Viavi Solutions Inc. provides network test, monitoring, and assurance solutions to communications service providers, enterprises, network equipment manufacturers, civil government, military, and avionics customers worldwide. The company operates through Network Enablement, Service Enablement, and Optical Security and Performance Products segments. The Network Enablement segment offers testing solutions that access the network to perform build-out and maintenance tasks. This segment provides solutions that include instruments, software, and services to design, build, activate, certify, troubleshoot, and optimize networks. It also offers support and professional services, such as repair, calibration, software support, and technical assistance for the products; and system integration projects, including project management, installation, and implementation, as well as product and technology training, and consulting services. The Service Enablement segment provides embedded systems and enterprise performance management solutions for communication service providers, enterprises, and cloud operators with visibility into network, service, and application data. Its solutions include instruments, microprobes, and software, which monitor, collect, and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. The Optical Security and Performance Products segment offers optical products for anti-counterfeiting, government, industrial, automotive, and consumer electronic markets, including 3D sensing applications. The company was formerly known as JDS Uniphase Corporation and changed its name to Viavi Solutions Inc. in August 2015. Viavi Solutions Inc. was founded in 1979 and is headquartered in San Jose, California.

Intel Company Profile

Intel Corporation offers computing, networking, data storage, and communication solutions worldwide. It operates through Client Computing Group, Data Center Group, Internet of Things Group, Non-Volatile Memory Solutions Group, Programmable Solutions Group, and All Other segments. The company offers microprocessors, and system-on-chip and multichip packaging products. It also provides NAND flash memory products primarily used in solid-state drives; and programmable semiconductors and related products for communications, data center, industrial, and military markets. In addition, the company develops computer vision and machine learning, data analysis, localization, and mapping for advanced driver assistance systems and autonomous driving. Its platforms are used in notebooks, systems, and desktops; cloud, enterprise, and communication infrastructure market segments; and retail, automotive, industrial, and various other embedded applications. It serves original equipment manufacturers, original design manufacturers, industrial and communication equipment manufacturers, and cloud service providers. Intel Corporation has a collaboration with Telefonaktiebolaget LM Ericsson (publ) to develop software defined infrastructure for network functions virtualization, distributed cloud, and 5G applications. The company was founded in 1968 and is based in Santa Clara, California.

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