Analyzing Ericsson (ERIC) & Envivio (ENVI)

Ericsson (NASDAQ: ERIC) and Envivio (NASDAQ:ENVI) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Institutional and Insider Ownership

8.1% of Ericsson shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Ericsson and Envivio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ericsson -8.60% -5.67% -2.57%
Envivio -5.31% -7.98% -4.76%

Valuation & Earnings

This table compares Ericsson and Envivio’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ericsson $26.02 billion 0.86 $200.60 million ($0.61) -11.00
Envivio N/A N/A N/A ($0.30) N/A

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

Dividends

Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 1.0%. Envivio does not pay a dividend. Ericsson pays out -11.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations for Ericsson and Envivio, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ericsson 2 7 4 0 2.15
Envivio 0 0 0 0 N/A

Ericsson presently has a consensus price target of $5.34, suggesting a potential downside of 20.42%.

Summary

Ericsson beats Envivio on 7 of the 9 factors compared between the two stocks.

Ericsson Company Profile

Telefonaktiebolaget LM Ericsson (Ericsson) provides infrastructure, services and software to the telecommunication industry and other sectors. The Company’s segments include Networks, IT & Cloud and Media. The Networks segment consists of two business units: Network Products and Network Services. The overall focus is on evolving and managing access networks, including the development of hardware and software for radio access and transport networks. The IT & Cloud business includes two business units: IT & Cloud Products and IT & Cloud Services. The focus in IT & Cloud is to help telecom operators and selected enterprises through the digital transformations ahead. It develops and delivers software-based solutions for television and media and combines a product portfolio that spans the television value chain, with systems integration and managed services. The portfolio includes compression, content publishing through set-top box or pure over-the-top, content delivery and analytics.

Envivio Company Profile

Envivio, Inc. is a provider of software-based Internet protocol (IP) video processing and distribution solutions that enable the delivery of video to consumers. The Company’s solutions enable service providers and content providers to offer video across a range of video formats, networks, consumer devices and operating systems. The Company enables service providers and content providers to deliver linear broadcast and on-demand video services to their customers via various screens, such as televisions, tablets, smartphones, laptops, personal computers (PCs) and gaming devices. The Company’s product line includes Muse, Halo, Envivio appliances and Guru. Its software-based solution delivers a converged multi-screen service for traditional Pay-television, and across mobile, broadband and managed networks. The Company’s solution enables the transport of video through different networks, such as broadband and mobile networks, or traditional cable and satellite broadcast networks.

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