Contrasting Avid Technology (NASDAQ:AVID) and National Instruments (NATI)

National Instruments (NASDAQ:NATI) and Avid Technology (NASDAQ:AVID) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Earnings & Valuation

This table compares National Instruments and Avid Technology’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Instruments $1.36 billion 4.35 $155.06 million $1.34 33.29
Avid Technology $419.00 million 0.50 -$13.55 million $0.40 12.50

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

Dividends

National Instruments pays an annual dividend of $0.92 per share and has a dividend yield of 2.1%. Avid Technology does not pay a dividend. National Instruments pays out 68.7% of its earnings in the form of a dividend. National Instruments has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

76.8% of National Instruments shares are owned by institutional investors. Comparatively, 54.6% of Avid Technology shares are owned by institutional investors. 8.0% of National Instruments shares are owned by company insiders. Comparatively, 7.9% of Avid Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

National Instruments has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Avid Technology has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for National Instruments and Avid Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Instruments 0 2 1 0 2.33
Avid Technology 0 3 0 0 2.00

National Instruments currently has a consensus target price of $48.00, indicating a potential upside of 7.60%. Avid Technology has a consensus target price of $5.50, indicating a potential upside of 10.00%. Given Avid Technology’s higher possible upside, analysts clearly believe Avid Technology is more favorable than National Instruments.

Profitability

This table compares National Instruments and Avid Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Instruments 11.41% 15.11% 11.07%
Avid Technology -4.28% -1.55% 1.24%

Summary

National Instruments beats Avid Technology on 14 of the 17 factors compared between the two stocks.

About National Instruments

National Instruments Corporation designs, manufactures, and sells systems to engineers and scientists worldwide. It offers LabVIEW, a system design software for measurement, automation, and control; LabVIEW Real-Time and LabVIEW FPGA, which are software add-ons to LabVIEW; LabVIEW Communications System Design Suite for wireless prototyping; LabWindows/CVI for creating test and control applications; and Measurement Studio consisting of measurement and automation add-on libraries, and additional tools for programmers. The company also provides software products, such as NI TestStand to test and measure applications in a manufacturing environment; NI VeriStand software to configure real-time testing applications; NI DIAdem, which provides technical data management, analysis, and report generation tools; NI InsightCM Enterprise for monitoring critical and ancillary rotating equipment; NI Multisim circuit design software; and NI SystemLink, a systems management software. In addition, it offers hardware products and related driver software, such as data acquisition, PXI chassis and controllers, modular instruments, image acquisition, motion control, distributed I/O, industrial communications interfaces, general purpose interface bus interfaces, embedded control hardware/software, and VME extension for instrumentation controllers. Further, the company provides NI semiconductor test systems; NI education platform comprising software, hardware, and courseware for students; software and hardware products for teaching; hardware and software maintenance services; and training and certification services. It serves advanced research, automotive, automated test equipment, consumer electronics, commercial aerospace, computers and electronics, continuous process manufacturing, education, government/defense, medical research/pharmaceutical, power/energy, semiconductors, and telecommunications industries. The company was founded in 1976 and is headquartered in Austin, Texas.

About Avid Technology

Avid Technology, Inc. develops, markets, sells, and supports software, hardware, and integrated solutions for video and audio content creation, management, and distribution worldwide. The company's video products and solutions include the Media Composer product line that is used to edit film, television programming, news broadcasts, commercials, and other video content; Avid shared storage systems and Avid Interplay asset management solutions, which provide complete network, storage, and database solutions to enable users to simultaneously share and manage media assets throughout a project or organization. Its audio products and solutions include Pro Tools digital audio software and workstation solutions to facilitate the audio production process, including music and sound creation, recording, editing, signal processing, integrated surround mixing and mastering, and reference video playback; and a range of complementary control surfaces and consoles, including the System 5 and System 6 modular consoles, as well as the VENUE live-sound systems and Sibelius-branded notation software. The company also provides various professional services, such as workflow design and consulting; program and project management; system installation and commissioning; custom development and role-based product level training; public and private training to customers and alliance partners; and service contracts and support plans, as well as develops and licenses curriculum content for use by third party Avid Learning partners to deliver training to customers, users, and alliance partners. It offers its products and solutions to customers in broadcast and media, video and audio post, and professional markets through a network of sales representatives, independent distributors, value-added resellers, dealers, retailers, and digital sales channels. The company was incorporated in 1987 and is headquartered in Burlington, Massachusetts.

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