Silicom (NASDAQ:SILC – Get Free Report) and Ericsson (NASDAQ:ERIC – Get Free Report) are both technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.
Volatility and Risk
Silicom has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Ericsson has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.
Earnings & Valuation
This table compares Silicom and Ericsson”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Silicom | $61.93 million | 3.11 | -$11.48 million | ($1.71) | -19.61 |
| Ericsson | $230.78 billion | 0.16 | $2.91 billion | $0.61 | 18.33 |
Ericsson has higher revenue and earnings than Silicom. Silicom is trading at a lower price-to-earnings ratio than Ericsson, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
52.8% of Silicom shares are held by institutional investors. Comparatively, 8.0% of Ericsson shares are held by institutional investors. 25.4% of Silicom shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares Silicom and Ericsson’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Silicom | -8.47% | -6.31% | -4.64% |
| Ericsson | 8.31% | 20.89% | 7.73% |
Analyst Recommendations
This is a breakdown of recent recommendations for Silicom and Ericsson, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Silicom | 1 | 0 | 1 | 0 | 2.00 |
| Ericsson | 4 | 5 | 1 | 0 | 1.70 |
Silicom currently has a consensus price target of $60.00, indicating a potential upside of 78.89%. Ericsson has a consensus price target of $9.60, indicating a potential downside of 14.13%. Given Silicom’s stronger consensus rating and higher probable upside, equities analysts plainly believe Silicom is more favorable than Ericsson.
About Silicom
Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for servers, server-based systems, and communications devices. It offers server network interface cards; and smart cards, such as smart server adapters, which include redirector and switching cards, encryption and data compression hardware acceleration cards, forward error correction acceleration and offloading cards, time synchronization cards, and field programmable gate array-based cards. The company also provides virtualized and universal customer-premises equipment; and edge devices for SD-WAN, secure access service edge, Telco dedicated routers, and NFV deployments. It serves original equipment manufacturing, cloud, telco, mobile, and related service provider markets. The company operates in the United States, North America, Israel, Europe, and the Asia Pacific. Silicom Ltd. was incorporated in 1987 and is headquartered in Kfar Saba, Israel.
About Ericsson
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Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions for telcom operators and enterprise customers in various sectors in North America, Europe, Latin America, the Middle East, Africa, North East Asia, South East Asia, Oceania, and India. It operates in four segments: Networks; Cloud Software and Services; Enterprise; and Other. The Networks segment offers radio access network (RAN) solutions for various network spectrum bands, including purpose-built and open RAN-prepared hardware and software. This segment also provides cloud RAN; transport solutions; passive and active antennas; and a range of service portfolios covering network deployment and support. The Cloud Software and Services segment offers core networks, business and operational support systems, network design and optimization, and managed network services. The Enterprise segment offers a global communications platform, including cloud-based unified communications as a service, contact center as a service, and communications platform as a service; enterprise wireless solutions comprising private wireless networks and wireless wan pre-packaged solutions; and technologies and new business solutions, such as mobile financial services, security solutions, and advertising services. The Other segment includes Redbee media that prepares and distributes live and video services for broadcasters, sports leagues, and communications service providers. It offers its services through wholesalers and distributors. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.
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