Harris (NYSE: HRS) and Ooma (NYSE:OOMA) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Earnings and Valuation

This table compares Harris and Ooma’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Harris $5.90 billion 2.96 $553.00 million $5.35 27.36
Ooma $104.52 million 2.18 -$12.94 million ($0.72) -16.67

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

Profitability

This table compares Harris and Ooma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harris 9.02% 23.36% 6.52%
Ooma -11.65% -32.29% -17.21%

Dividends

Harris pays an annual dividend of $2.28 per share and has a dividend yield of 1.6%. Ooma does not pay a dividend. Harris pays out 42.6% of its earnings in the form of a dividend. Harris has raised its dividend for 16 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Harris and Ooma, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harris 0 1 5 0 2.83
Ooma 1 2 2 0 2.20

Harris presently has a consensus price target of $144.17, suggesting a potential downside of 1.53%. Ooma has a consensus price target of $12.67, suggesting a potential upside of 5.56%. Given Ooma’s higher possible upside, analysts clearly believe Ooma is more favorable than Harris.

Institutional & Insider Ownership

84.3% of Harris shares are held by institutional investors. Comparatively, 72.3% of Ooma shares are held by institutional investors. 1.9% of Harris shares are held by insiders. Comparatively, 11.4% of Ooma shares are held by 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.

Risk and Volatility

Harris has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Ooma has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Summary

Harris beats Ooma on 13 of the 17 factors compared between the two stocks.

About Harris

Harris Corporation is a technology company that provides products, systems and services that have defense and civil government applications, as well as commercial applications. It offers its products and services to government and commercial customer. It operates in four segments: Communication Systems, which serves markets in tactical communications and defense, and public safety networks; Space and Intelligence Systems, which provides complete Earth observation, environmental, geospatial, space protection, and intelligence solutions from advanced sensors and payloads, as well as ground processing and information analytics; Electronic Systems, which offers a portfolio of solutions in electronic warfare, avionics, wireless and technology, among others, and Critical Networks, which provides managed services supporting air traffic management, energy and maritime communications, and ground network operation and sustainment, as well as information technology (IT) and engineering services.

About Ooma

Ooma, Inc. is a United States-based company, which offers Ooma, a communications platform for small businesses and consumers. Ooma serves as a communications hub, which offers cloud-based telephony, Internet security, home monitoring and other connected services. Ooma combines PureVoice high definition (HD) call quality features with mobile applications anytime, anywhere calling. Ooma is a full router capable of prioritizing voice data and directing traffic to ensure reliable phone service. Its enterprise-grade phone service built for small business includes features, such as calling features, including unlimited calling in United States and Canada, 911 service and toll-free numbers available; office features, including virtual receptionist, extension dialing and voicemail; mobility features, including call forwarding, voicemail forwarding and multi-ring, and one-touch Internet protocol (IP) phone features, including three way conference, transfer calls and call on hold.

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