Viavi Solutions Inc. (NASDAQ:VIAV) and Infinera Corporation (NASDAQ:INFN) are both Technology companies that recently hit new highs. Naturally, this has created a bit of a stir amongst investors. We will compare the two companies across various metrics including growth, profitability, risk, return, dividends, and valuation to determine if one is a better choice than the other.
Viavi Solutions Inc. (NASDAQ:VIAV) operates in the Communication Equipment segment of the Technology sector. The company has grown sales at a -13.40% annual rate over the past five years, putting it in the low growth category. VIAV has a net profit margin of 3.90% and is more profitable than the average company in the Communication Equipment industry. In terms of efficiency, VIAV has an asset turnover ratio of 0.86. This figure represents the amount of revenue a company generates per dollar of assets. VIAV’s financial leverage ratio is 0.8, which indicates that the company’s asset base is primarily funded by equity capital. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 4.10%, which is better than the Communication Equipment industry average ROE.
Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is 0.82. Company trades at a P/E ratio of 77.14 , and is more expensive than the average stock in the Communication Equipment industry. The average investment recommendation for VIAV, taken from a group of Wall Street Analysts, is 2.10, or a buy.
Over the past three months, Viavi Solutions Inc. insiders have been net sellers, acquiring a net of 44,260 shares. This implies that insiders have been feeling relatively bullish about the outlook for VIAV. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. VIAV has a beta of 0.74 and therefore an below average level of market volatility.
Infinera Corporation (NASDAQ:INFN) operates in the Communication Equipment segment of the Technology sector. INFN has increased sales at a 16.50% CAGR over the past five years, and is considered a high growth stock. The company has a net profit margin of -17.60% and is less profitable than the average Communication Equipment player. INFN’s asset turnover ratio is 0.61 and the company has financial leverage of 0.63. INFN’s return on equity of -17.50% is worse than the Communication Equipment industry average.
The average analyst recommendation for INFN is 2.30, or a buy.
Infinera Corporation insiders have sold a net of -15,546 shares during the past three months, which implies that the company’s top executives have been feeling bearish about the stock’s outlook. Finally, INFN’s beta of 0.36 indicates that the stock has an below average level of market risk.
Viavi Solutions Inc. (NASDAQ:VIAV) scores higher than Infinera Corporation (NASDAQ:INFN) on 6 of the 13 measures compared between the two companies. VIAV has the better fundamentals, scoring higher on profitability, efficiency and return metrics. VIAV has better insider activity and sentiment signals.