Reviewing AudioCodes (NASDAQ:AUDC) and HMS Networks AB (publ) (OTCMKTS:HMNKF)

AudioCodes (NASDAQ:AUDC) and HMS Networks AB (publ) (OTCMKTS:HMNKF) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Profitability

This table compares AudioCodes and HMS Networks AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AudioCodes	2.83%	6.79%	3.45%
HMS Networks AB (publ)	N/A	N/A	N/A

Valuation and Earnings

This table compares AudioCodes and HMS Networks AB (publ)”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AudioCodes	$245.60 million	1.01	$8.95 million	$0.26	39.69
HMS Networks AB (publ)	N/A	N/A	N/A	$5.61	8.68

AudioCodes has higher revenue and earnings than HMS Networks AB (publ). HMS Networks AB (publ) is trading at a lower price-to-earnings ratio than AudioCodes, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for AudioCodes and HMS Networks AB (publ), as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AudioCodes	0	2	0	0	2.00
HMS Networks AB (publ)	0	0	3	0	3.00

Insider and Institutional Ownership

68.0% of AudioCodes shares are held by institutional investors. 48.8% of AudioCodes shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

AudioCodes pays an annual dividend of $0.40 per share and has a dividend yield of 3.9%. HMS Networks AB (publ) pays an annual dividend of $2.25 per share and has a dividend yield of 4.6%. AudioCodes pays out 153.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HMS Networks AB (publ) pays out 40.1% of its earnings in the form of a dividend. HMS Networks AB (publ) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

AudioCodes beats HMS Networks AB (publ) on 7 of the 12 factors compared between the two stocks.

About AudioCodes

AudioCodes Ltd. provides advanced communications software, products, and productivity solutions for the digital workplace worldwide. The company offers solutions, products, and services for unified communications, contact centers, hosted business services, Voice.AI, and service provider businesses. Its products include session border controllers, life cycle management solutions, VoIP network routing solutions, media gateways and servers, multi-service business routers, IP phones solutions, and value-added applications, as well as professional services. The company also offers One Voice Operations Center, a voice network management solution; Device Manager for administering business phones and meeting room solutions; AudioCodes Routing Manager for handling call routing in VoIP networks; and User Management Pack 365 simplifies user lifecycle and identity management across Microsoft Teams and Skype for Business deployments. In addition, it provides AudioCodes Live for Microsoft Teams, a portfolio of managed services for simplifying Teams adoption; appliances for Microsoft Skype/Teams for Business, such as survivable branch appliances, CCE, and CloudBond 365; and a range of value-added voice applications comprising SmartTAP, Voca, VoiceAI Connect, and Meeting Insights. Further, the company offers managed services; and AudioCodes Live Platform is a SaaS solution that enables service providers to offer their business customers a seamless migration to uCaaS solutions, such as Microsoft Teams and Zoom Phone. It primarily markets and sells its products through a direct sales force and sales representatives to original equipment manufacturers, network equipment providers, and systems integrators, enterprises, carriers, and distributors in the telecommunications and networking industries. AudioCodes Ltd. was incorporated in 1992 and is headquartered in Lod, Israel.

About HMS Networks AB (publ)

HMS Networks AB (publ) engages in the provision of products that enable industrial equipment to communicate and share information worldwide. The company offers Anybus Embedded that offers multi-network connectivity with a single development project; Anybus Gateways, a gateway for connecting devices, machines, systems, or networks; Anybus Wireless that allows to connect machines and devices over Bluetooth, Wi-Fi, cellular networks, and industrial Ethernet; and Anybus Diagnostics, which offers tools and services to monitor, analyze, and troubleshoot industrial networks. It also provides Ewon Cosy, an industrial VPN device for secure remote access; Ewon Flexy, an industrial device and IIoT gateways for flexible remote access and data services; Ewon Flexy Extension Cards, which allow to keep up with the evolution of communication technologies while protecting investment in the device; and Ewon Talk2M, an industrial cloud that enables its customers to access their assets; Ewon Netbiter, a gateway to remote connectivity for energy generation systems; and Argos, a IIoT cloud dashboard, as well as offers other IIoT softwares. In addition, the company offers Intesis protocol translators, air conditioner interfaces, AC Cloud control, and ST cloud control solutions; and PC interfaces, repeaters, bridges, routers, gateways, and safety solutions under the Ixxat brand. Further, it provides Owasys, a wireless communication platforms, as well as offers brand labeling, system, software, and maintenance solutions. The company offers its solutions to device manufactures, machine builders, system integrators, and end users. HMS Networks AB (publ) was founded in 1988 and is headquartered in Halmstad, Sweden.