Financial Analysis: ORBCOMM (ORBC) and United States Cellular Corporation (NYSE:USM)
ORBCOMM (NASDAQ: ORBC) and United States Cellular Corporation (NYSE:USM) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.
Insider & Institutional Ownership
80.4% of ORBCOMM shares are owned by institutional investors. Comparatively, 14.8% of United States Cellular Corporation shares are owned by institutional investors. 9.5% of ORBCOMM shares are owned by company insiders. Comparatively, 1.6% of United States Cellular Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a summary of recent ratings and target prices for ORBCOMM and United States Cellular Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United States Cellular Corporation||1||2||0||0||1.67|
ORBCOMM currently has a consensus price target of $12.88, indicating a potential upside of 16.73%. United States Cellular Corporation has a consensus price target of $35.50, indicating a potential downside of 8.51%. Given ORBCOMM’s stronger consensus rating and higher possible upside, analysts plainly believe ORBCOMM is more favorable than United States Cellular Corporation.
Earnings and Valuation
This table compares ORBCOMM and United States Cellular Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ORBCOMM||$202.00 million||3.91||$36.94 million||($0.45)||-24.51|
|United States Cellular Corporation||$3.88 billion||0.85||$625.00 million||$0.58||66.90|
United States Cellular Corporation has higher revenue and earnings than ORBCOMM. ORBCOMM is trading at a lower price-to-earnings ratio than United States Cellular Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
ORBCOMM has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, United States Cellular Corporation has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.
This table compares ORBCOMM and United States Cellular Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United States Cellular Corporation||1.26%||1.12%||0.58%|
ORBCOMM beats United States Cellular Corporation on 7 of the 13 factors compared between the two stocks.
ORBCOMM Inc. is a provider of Internet of Things (IoT) solutions, including network connectivity, devices, device management and Web reporting applications. The Company’s IoT products and services are designed to track, monitor and manage security for a range of assets, such as trailers, trucks, rail cars, sea containers, generators, fluid tanks, marine vessels, diesel or electric powered generators (gensets), oil and gas wells, pipeline monitoring equipment, irrigation control systems, and utility meters, in industries for transportation and supply chain, heavy equipment, fixed asset monitoring, maritime and government. It also provides Automatic Identification System (AIS) data services to assist in vessel navigation and to manage maritime safety for government and commercial customers across the world. It provides its services using various network platforms, including its own constellation of low-Earth orbit (LEO) satellites.
About United States Cellular Corporation
United States Cellular Corporation (U.S. Cellular) is a provider of wireless telecommunication services. The Company’s wireless operating markets are in the United States. U.S. Cellular provides service to postpaid and prepaid customers from a range of demographic segments. The Company focuses on retail consumers, government and small-to-mid-size business customers in industries, such as construction, retail, professional services and real estate. The Company offers a range of wireless devices, such as handsets, modems, mobile hotspots, home phones and tablets for use by its customers. U.S. Cellular offers wireless devices that are compatible with fourth generation long term evolution (4G LTE) and third generation (3G) networks. U.S. Cellular offers a range of accessories, such as carrying cases, hands-free devices, batteries, battery chargers, and memory cards to related consumer electronics, such as headphones, speakers and Bluetooth keyboards.
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