Comparing PC Tel (PCTI) & Mitel Networks (MITL)

PC Tel (NASDAQ: PCTI) and Mitel Networks (NASDAQ:MITL) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Institutional and Insider Ownership

83.8% of PC Tel shares are owned by institutional investors. Comparatively, 84.3% of Mitel Networks shares are owned by institutional investors. 6.8% of PC Tel shares are owned by insiders. Comparatively, 5.6% of Mitel Networks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

PC Tel has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, Mitel Networks has a beta of 2.43, suggesting that its share price is 143% more volatile than the S&P 500.

Earnings and Valuation

This table compares PC Tel and Mitel Networks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PC Tel $91.44 million 1.29 $3.82 million $0.10 64.40
Mitel Networks $1.06 billion 1.27 -$49.70 million ($0.40) -27.40

PC Tel has higher earnings, but lower revenue than Mitel Networks. Mitel Networks is trading at a lower price-to-earnings ratio than PC Tel, indicating that it is currently the more affordable of the two stocks.

Dividends

PC Tel pays an annual dividend of $0.22 per share and has a dividend yield of 3.4%. Mitel Networks does not pay a dividend. PC Tel pays out 220.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares PC Tel and Mitel Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PC Tel 3.32% 1.44% 1.25%
Mitel Networks -4.31% -14.62% -3.32%

Analyst Ratings

This is a summary of current ratings and target prices for PC Tel and Mitel Networks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PC Tel 0 0 1 0 3.00
Mitel Networks 0 3 1 0 2.25

PC Tel currently has a consensus price target of $8.50, indicating a potential upside of 31.99%. Mitel Networks has a consensus price target of $13.05, indicating a potential upside of 19.07%. Given PC Tel’s stronger consensus rating and higher possible upside, research analysts plainly believe PC Tel is more favorable than Mitel Networks.

Summary

PC Tel beats Mitel Networks on 11 of the 15 factors compared between the two stocks.

About PC Tel

PCTEL, Inc., together with its subsidiaries, delivers performance critical telecom solutions in the Asia Pacific, Europe, the Middle East, Africa, and the Americas. The company operates in two segments, Connected Solutions and RF Solutions. The Connected Solutions segment designs and delivers precision antennas, which are used primarily in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in equipment and devices for the Industrial Internet of Things. The RF Solutions segment provides test tools that enhance the performance of wireless networks. The company serves public and private carriers, wireless infrastructure providers, wireless equipment distributors, and value added resellers, as well as original equipment manufacturer providers. PCTEL, Inc. was founded in 1994 and is headquartered in Bloomingdale, Illinois.

About Mitel Networks

Mitel Networks Corporation provides cloud and on-site business communications and collaboration software, services, and solutions. It operates in two segments, Enterprise and Cloud. The Enterprise segment sells and supports products and services for premise-based customers, including its premise-based IP and TDM telephony platforms; desktop devices, and unified communications and collaborations (UCC); and contact center applications that are deployed on the customer's premise under the MiVoice brand. The Cloud segment offers retail cloud services, such as UCC applications, voice and data telecommunications, and desktop devices that provide hosted cloud and related services directly to the end users under the MiCloud brand. It also provides wholesale services comprising hosted PBX, voice and video calling, SIP trunking, voicemail, call center, audio conferencing, and video and Web collaboration services to service providers under the Powered by Mitel brand. The company sells its solutions through direct and indirect channels, as well as through strategic technology partnerships in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. Mitel Networks Corporation was incorporated in 2001 and is headquartered in Ottawa, Canada.

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