Reviewing Iridium Communications (NASDAQ:IRDM) & SES (OTCMKTS:SGBAF)

Iridium Communications (NASDAQ:IRDM) and SES (OTCMKTS:SGBAF) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Valuation and Earnings

This table compares Iridium Communications and SES”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iridium Communications	$830.68 million	3.72	$112.78 million	$1.06	26.97
SES	$2.17 billion	1.61	$16.23 million	($0.10)	-62.70

Iridium Communications has higher earnings, but lower revenue than SES. SES is trading at a lower price-to-earnings ratio than Iridium Communications, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Iridium Communications has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, SES has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Dividends

Iridium Communications pays an annual dividend of $0.56 per share and has a dividend yield of 2.0%. SES pays an annual dividend of $0.50 per share and has a dividend yield of 8.0%. Iridium Communications pays out 52.8% of its earnings in the form of a dividend. SES pays out -500.0% 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. Iridium Communications has raised its dividend for 1 consecutive years. SES is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

84.4% of Iridium Communications shares are owned by institutional investors. 2.4% of Iridium Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Iridium Communications and SES’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iridium Communications	14.68%	19.41%	4.60%
SES	-1.45%	2.52%	0.92%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Iridium Communications and SES, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iridium Communications	0	1	4	0	2.80
SES	0	2	0	0	2.00

Iridium Communications presently has a consensus target price of $34.25, indicating a potential upside of 19.80%. Given Iridium Communications’ stronger consensus rating and higher possible upside, research analysts clearly believe Iridium Communications is more favorable than SES.

Summary

Iridium Communications beats SES on 14 of the 17 factors compared between the two stocks.

About Iridium Communications

Iridium Communications Inc. provides mobile voice and data communications services and products to businesses, the United States and international governments, non-governmental organizations, and consumers worldwide. The company offers postpaid mobile voice and data satellite communications; prepaid mobile voice satellite communications; push-to-talk; broadband data; and Internet of Things (IoT) services. It also provides hosted payload and other data services, such as satellite time and location services; and inbound connections from the public switched telephone network, short message, subscriber identity module, activation, customer reactivation, and other peripheral services. In addition, the company offers voice and data solutions comprising personnel tracking devices; asset tracking devices for equipment, vehicles, and aircrafts; beyond-line-of-sight aircraft communications applications; maritime communications applications; specialized communications solutions for high-value individuals; mobile communications and data devices for the military and other government agencies, such as secure satellite handsets, as well as netted voice, messaging, and paging services; and maintenance services for the United States government's dedicated gateway. Further, it provides satellite handsets, voice and data modems, broadband data devices, and IoT data devices; various accessories for its devices that include batteries, holsters, earbud headphones, portable auxiliary antennas, antenna adaptors, USB data cables, charging units, and others; and engineering and support services. Iridium Communications Inc. sells its products and services to commercial end users through a wholesale distribution network that include service providers, and value-added resellers and manufacturers. The company was formerly known as Iridium Holdings LLC and changed its name to Iridium Communications Inc. in September 2009. Iridium Communications Inc. is headquartered in McLean, Virginia.

About SES

SES S.A. provides satellite-based data transmission capacity and ancillary services worldwide. The company offers content connectivity solutions, including network spanning satellite and ground infrastructure to create, deliver, and manage video and data solutions. It also provides data connectivity services through its fleet of geostationary earth orbit and medium earth orbit satellites to the aviation, cloud, cruise, energy, government, maritime, and telco and mobile network operator industries. In addition, the company offers video services, which includes end-to-end managed services to audience; and provides multi-screen and multi-device viewing experiences on linear channels, video-on-demand, streaming platforms, and social media sites for broadcasters, platform operators, and sports organizations. Further, it provides linear video aggregation and distribution, such as direct-to-home, direct-to-cable, and internet protocol TV households; channel management solutions comprising playout; and live feeds and redundancy features. The company was formerly known as SES Global SA and changed its name to SES S.A. in December 2006. SES S.A. was founded in 1985 and is headquartered in Betzdorf, Luxembourg.