West Corporation (NASDAQ: WSTC) and Plantronics (NYSE:PLT) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.
Volatility and Risk
West Corporation has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, Plantronics has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.
Valuation and Earnings
This table compares West Corporation and Plantronics’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|West Corporation||$2.29 billion||0.85||$636.33 million||$2.51||9.30|
|Plantronics||$862.00 million||1.56||$138.73 million||$2.47||16.75|
West Corporation has higher revenue and earnings than Plantronics. West Corporation is trading at a lower price-to-earnings ratio than Plantronics, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for West Corporation and Plantronics, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
West Corporation presently has a consensus price target of $24.50, suggesting a potential upside of 4.93%. Plantronics has a consensus price target of $60.00, suggesting a potential upside of 45.07%. Given Plantronics’ stronger consensus rating and higher probable upside, analysts plainly believe Plantronics is more favorable than West Corporation.
This table compares West Corporation and Plantronics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
West Corporation pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. Plantronics pays an annual dividend of $0.60 per share and has a dividend yield of 1.5%. West Corporation pays out 17.9% of its earnings in the form of a dividend. Plantronics pays out 24.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. West Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
69.6% of West Corporation shares are held by institutional investors. Comparatively, 90.1% of Plantronics shares are held by institutional investors. 4.6% of West Corporation shares are held by company insiders. Comparatively, 3.2% of Plantronics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Plantronics beats West Corporation on 9 of the 16 factors compared between the two stocks.
West Corporation Company Profile
West Corporation is a provider of communication and network infrastructure services. The Company helps its clients communicate, collaborate and connect with their audiences through a portfolio of solutions that include unified communications services, safety services, and interactive services, such as automated notifications, specialized agent services and telecom services. The Company’s segments include Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes carrier services, government solutions and advanced services; Interactive Services, including outbound (proactive notifications-voice, text/short messaging service (SMS) and chat), inbound speech solutions (interactive voice response or IVR), Web, mobile and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation.
Plantronics Company Profile
Plantronics, Inc. (Plantronics) is engaged in the design, manufacture, and distribution of headsets for business and consumer applications, and other specialty products for the hearing impaired. The Company is a global designer, manufacturer and marketer of communications headsets, telephone headset systems, other communication endpoints and accessories for the business and consumer markets. The Company develops communication products for offices and contact centers, mobile devices, cordless phones, and computers and gaming consoles. Its product categories include Enterprise, which includes corded and cordless communication headsets, audio processors, and telephone systems, and Consumer, which includes Bluetooth and corded products for mobile device applications, personal computer (PC) and gaming headsets, and specialty products marketed for hearing impaired individuals. It offers its products under two brands: Plantronics and Clarity.
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