Critical Comparison: Plantronics (PLT) vs. Sierra Wireless (SWIR)

Plantronics (NYSE: PLT) and Sierra Wireless (NASDAQ:SWIR) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Insider and Institutional Ownership

91.2% of Plantronics shares are held by institutional investors. Comparatively, 25.0% of Sierra Wireless shares are held by institutional investors. 3.2% of Plantronics shares are held by company insiders. Comparatively, 2.0% of Sierra Wireless shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Plantronics and Sierra Wireless’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Plantronics $862.00 million 1.73 $138.73 million $2.47 18.60
Sierra Wireless $651.88 million 1.08 $42.36 million $0.62 35.48

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

Profitability

This table compares Plantronics and Sierra Wireless’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Plantronics 9.40% 21.31% 7.81%
Sierra Wireless 3.13% 9.16% 5.84%

Dividends

Plantronics pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. Sierra Wireless does not pay a dividend. Plantronics pays out 24.3% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for Plantronics and Sierra Wireless, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Plantronics 0 1 2 0 2.67
Sierra Wireless 0 8 2 0 2.20

Plantronics currently has a consensus target price of $60.00, indicating a potential upside of 30.61%. Sierra Wireless has a consensus target price of $26.28, indicating a potential upside of 19.46%. Given Plantronics’ stronger consensus rating and higher probable upside, research analysts clearly believe Plantronics is more favorable than Sierra Wireless.

Volatility and Risk

Plantronics has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 3.14, indicating that its stock price is 214% more volatile than the S&P 500.

Summary

Plantronics beats Sierra Wireless on 12 of the 15 factors compared between the two stocks.

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.

Sierra Wireless Company Profile

Sierra Wireless, Inc. is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s OEM Solution segment offers cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. The Company’s Enterprise Solution segment offers intelligent routers and gateways, including management tools and applications that enable cellular connectivity. The Company’s Cloud and Connectivity Services segment offers a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments. The Company offers a portfolio of second generation, third generation, and fourth generation cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises.

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