QLogic (QLGC) & EMC (EMC) Critical Contrast

EMC (NYSE: EMC) and QLogic (NASDAQ:QLGC) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares EMC and QLogic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMC 10.47% 10.66% 5.47%
QLogic 15.71% 9.67% 8.76%

Analyst Recommendations

This is a summary of recent recommendations for EMC and QLogic, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMC 0 4 1 0 2.20
QLogic 0 0 0 0 N/A

EMC currently has a consensus target price of $29.00, suggesting a potential downside of 0.17%. Given EMC’s higher probable upside, equities research analysts clearly believe EMC is more favorable than QLogic.

Earnings and Valuation

This table compares EMC and QLogic’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EMC N/A N/A N/A $1.07 27.15
QLogic N/A N/A N/A $0.75 21.43

QLogic is trading at a lower price-to-earnings ratio than EMC, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

EMC has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, QLogic has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Dividends

EMC pays an annual dividend of $0.46 per share and has a dividend yield of 1.6%. QLogic does not pay a dividend. EMC pays out 43.0% of its earnings in the form of a dividend. EMC has increased its dividend for 3 consecutive years.

Insider & Institutional Ownership

79.9% of EMC shares are owned by institutional investors. 0.4% of EMC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

EMC beats QLogic on 9 of the 12 factors compared between the two stocks.

About EMC

EMC Corporation (EMC) develops, delivers and supports the information technology (IT) industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC manages the Company as part of a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure, Pivotal and Virtustream. EMC’s Information Infrastructure business provides a foundation for organizations to store, manage, protect, analyze and secure information. EMC’s VMware Virtual Infrastructure business is engaged in virtualization and cloud infrastructure solutions that enable businesses to help transform the way they build, deliver and consume IT resources in a manner that is based on their specific needs. EMC’s Pivotal business unites strategic technology, people and programs from EMC and VMware and has a platform that consists of data, agile development practices and a cloud independent platform-as-a-service.

About QLogic

QLogic Corporation (QLogic), designs and supplies server and storage networking connectivity products that provide and manage computer data communication. The Company’s products facilitate the transfer of data and enable resource sharing between servers, networks and storage. Its products are used in enterprise, managed service provider, consumer Web, and cloud service provider data centers. Its products are based primarily on Fiber Channel and Ethernet technologies and are used in connection with storage networks, data networks and converged networks. Storage networks are used to provide access to storage across enterprise environments. Fibre Channel is a technology for enterprise storage networking. Data networks are used to provide workstation-to-server, server-to-server, and server-to-storage connectivity using Ethernet. Converged networks are designed to address the data center by consolidating and unifying storage and data networks, using high-speed Ethernet.

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