Critical Review: Oclaro (OCLR) vs. Harris Corporation (HRS)
Oclaro (NASDAQ: OCLR) and Harris Corporation (NYSE:HRS) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.
Insider & Institutional Ownership
70.7% of Oclaro shares are held by institutional investors. Comparatively, 84.5% of Harris Corporation shares are held by institutional investors. 2.0% of Oclaro shares are held by company insiders. Comparatively, 1.9% of Harris Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Harris Corporation pays an annual dividend of $2.28 per share and has a dividend yield of 1.6%. Oclaro does not pay a dividend. Harris Corporation pays out 50.9% of its earnings in the form of a dividend. Oclaro has raised its dividend for 15 consecutive years.
This is a summary of current ratings and recommmendations for Oclaro and Harris Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Oclaro presently has a consensus price target of $12.67, indicating a potential upside of 104.63%. Harris Corporation has a consensus price target of $144.17, indicating a potential upside of 3.41%. Given Oclaro’s stronger consensus rating and higher possible upside, analysts clearly believe Oclaro is more favorable than Harris Corporation.
Valuation and Earnings
This table compares Oclaro and Harris Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Oclaro||$600.97 million||1.74||$127.85 million||$0.89||6.96|
|Harris Corporation||$5.90 billion||2.82||$553.00 million||$4.48||31.12|
Harris Corporation has higher revenue and earnings than Oclaro. Oclaro is trading at a lower price-to-earnings ratio than Harris Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Oclaro and Harris Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Oclaro has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500. Comparatively, Harris Corporation has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.
Oclaro beats Harris Corporation on 11 of the 18 factors compared between the two stocks.
Oclaro Company Profile
Oclaro, Inc. is a provider of optical components, modules and subsystems for the core optical transport, service provider, enterprise and data center markets. The Company provides various solutions for optical networks and interconnects driving the next wave of streaming video, cloud computing, application virtualization and other bandwidth-intensive and high-speed applications. The Company’s product offerings include client side transceivers, line side transceivers, tunable laser transmitters, lithium niobate modulators, transponder modules, and discrete lasers and receivers. It designs, manufactures and markets optical components, modules and subsystems that generate, detect, combine and separate light signals in optical communications networks. The Company supplies transmission products at the component level and the module level into 10 gigabits per second (Gb/s), 40 Gb/s and 100 Gb/s communications solutions.
Harris Corporation Company Profile
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.
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