Financial Contrast: InterDigital (IDCC) versus The Competition

InterDigital (NASDAQ:IDCC) is one of 955 public companies in the “Software” industry, but how does it compare to its rivals? We will compare InterDigital to similar companies based on the strength of its dividends, analyst recommendations, risk, earnings, institutional ownership, valuation and profitability.

Volatility and Risk

InterDigital has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, InterDigital’s rivals have a beta of 1.15, meaning that their average share price is 15% more volatile than the S&P 500.

Valuation and Earnings

This table compares InterDigital and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
InterDigital	$788.50 million	$406.64 million	38.55
InterDigital Competitors	$1.87 billion	$383.51 million	112.31

InterDigital’s rivals have higher revenue, but lower earnings than InterDigital. InterDigital is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of recent recommendations for InterDigital and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
InterDigital	0	1	3	0	2.75
InterDigital Competitors	5710	21462	44701	1489	2.57

InterDigital currently has a consensus price target of $450.00, suggesting a potential upside of 34.62%. As a group, “Software” companies have a potential upside of 26.44%. Given InterDigital’s stronger consensus rating and higher probable upside, research analysts plainly believe InterDigital is more favorable than its rivals.

Dividends

InterDigital pays an annual dividend of $3.00 per share and has a dividend yield of 0.9%. InterDigital pays out 34.6% of its earnings in the form of a dividend. As a group, “Software” companies pay a dividend yield of 2.0% and pay out 50.4% of their earnings in the form of a dividend. InterDigital has raised its dividend for 3 consecutive years.

Institutional and Insider Ownership

99.8% of InterDigital shares are owned by institutional investors. Comparatively, 42.0% of shares of all “Software” companies are owned by institutional investors. 3.5% of InterDigital shares are owned by company insiders. Comparatively, 19.7% of shares of all “Software” companies are owned 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.

Profitability

This table compares InterDigital and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
InterDigital	38.32%	28.17%	15.00%
InterDigital Competitors	-630.58%	17.61%	-8.96%

Summary

InterDigital beats its rivals on 10 of the 15 factors compared.

About InterDigital

InterDigital, Inc. operates as a global research and development company with focus primarily on wireless, visual, artificial intelligence (AI), and related technologies. The company engages in the design and development of technologies that enable connected in a range of communications and entertainment products and services, which are licensed to companies providing such products and services, including makers of wireless communications, consumer electronics, IoT devices, and cars and other motor vehicles, as well as providers of cloud-based services, such as video streaming. It designs and develops a range of innovations for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company also develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G, 5G, advanced and 6G, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. In addition, it provides video coding and transmission technologies; and engages in the research and development of artificial intelligence and machine learning solutions. Further, the company's patented technologies are used in various products that include smartphones, tablets, consumer electronics, and base stations; televisions, laptops, gaming consoles, set-top boxes, streaming devices, and connected automobiles. InterDigital, Inc. was incorporated in 1972 and is headquartered in Wilmington, Delaware.