InterDigital (IDCC) versus AudioCodes (AUDC) Head to Head Survey

AudioCodes (NASDAQ: AUDC) and InterDigital (NASDAQ:IDCC) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Insider and Institutional Ownership

23.8% of AudioCodes shares are held by institutional investors. Comparatively, 71.6% of InterDigital shares are held by institutional investors. 48.8% of AudioCodes shares are held by insiders. Comparatively, 1.9% of InterDigital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

InterDigital pays an annual dividend of $1.40 per share and has a dividend yield of 1.8%. AudioCodes does not pay a dividend. InterDigital pays out 19.3% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares AudioCodes and InterDigital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AudioCodes $156.74 million 1.41 $4.03 million $0.12 64.42
InterDigital $665.85 million 4.01 $309.00 million $7.24 10.62

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

Volatility and Risk

AudioCodes has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500. Comparatively, InterDigital has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for AudioCodes and InterDigital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AudioCodes 0 1 2 0 2.67
InterDigital 0 2 2 0 2.50

AudioCodes presently has a consensus price target of $8.00, suggesting a potential upside of 3.49%. InterDigital has a consensus price target of $94.00, suggesting a potential upside of 22.24%. Given InterDigital’s higher possible upside, analysts plainly believe InterDigital is more favorable than AudioCodes.

Profitability

This table compares AudioCodes and InterDigital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AudioCodes 2.57% 9.82% 5.50%
InterDigital 42.94% 32.77% 14.02%

Summary

InterDigital beats AudioCodes on 11 of the 15 factors compared between the two stocks.

AudioCodes Company Profile

AudioCodes Ltd. designs, develops and sells Voice over-Internet Protocol (VoIP) and converged VoIP, and data networking solutions, products and applications that facilitate Unified Communications (UC) and Contact Center (CC) services. The Company categorizes its products and services into two main business lines: network and technology. Network products consist of customer premises equipment (CPE), gateways for the enterprise and service provider (or carrier) markets and of carrier-grade-oriented low- and mid-density media gateways for service providers and Enterprise Session Border Controls (ESBCs). Complementing its media gateways and session border gateways as network products are its multi-service business routers (MSBR), Internet Protocol (IP) phones, media servers, mobile VoIP solutions and value added application products. Technology products consist of its chips and boards business products. Its products are deployed in enterprise, service provider cloud networks.

InterDigital Company Profile

InterDigital, Inc. designs and develops technologies for wireless communications. The Company is focused on three technology areas: cellular wireless technology, Internet of things (IoT) technology, and, through its Hillcrest Laboratories, Inc. (Hillcrest Labs) subsidiary, sensor and sensor fusion technology. It offers a range of technologies that are used in digital cellular and wireless products and networks, including second generation (2G), third generation (3G), fourth generation (4G) and IEEE 802-related products and networks. Products incorporating its inventions include mobile devices, such as cellular phones, tablets, notebook computers and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; components, dongles and modules for wireless devices, and IoT devices and software platforms. The Company is developing a range of technologies in the areas of video compression and delivery, security, analytics, and other areas.

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