NTT Docomo (DCMYY) versus Sierra Wireless (SWIR) Financial Review

NTT Docomo (OTCMKTS:DCMYY) and Sierra Wireless (NASDAQ:SWIR) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Insider and Institutional Ownership

0.1% of NTT Docomo shares are held by institutional investors. Comparatively, 26.3% of Sierra Wireless shares are held by institutional investors. 2.0% of Sierra Wireless shares are held 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.

Analyst Ratings

This is a breakdown of current recommendations for NTT Docomo and Sierra Wireless, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NTT Docomo 0 0 0 0 N/A
Sierra Wireless 2 4 4 0 2.20

Sierra Wireless has a consensus target price of $17.39, indicating a potential upside of 31.34%. Given Sierra Wireless’ higher probable upside, analysts clearly believe Sierra Wireless is more favorable than NTT Docomo.

Profitability

This table compares NTT Docomo and Sierra Wireless’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NTT Docomo 13.70% 11.27% 8.74%
Sierra Wireless -3.52% 0.40% 0.26%

Valuation and Earnings

This table compares NTT Docomo and Sierra Wireless’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NTT Docomo $43.67 billion 1.91 $5.99 billion $1.69 13.29
Sierra Wireless $793.60 million 0.60 -$24.61 million $0.13 101.85

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

Volatility and Risk

NTT Docomo has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 2.35, indicating that its stock price is 135% more volatile than the S&P 500.

Dividends

NTT Docomo pays an annual dividend of $0.73 per share and has a dividend yield of 3.3%. Sierra Wireless does not pay a dividend. NTT Docomo pays out 43.2% of its earnings in the form of a dividend.

Summary

NTT Docomo beats Sierra Wireless on 8 of the 15 factors compared between the two stocks.

NTT Docomo Company Profile

NTT DOCOMO, INC., a telecommunications company, provides various mobile services in Japan and internationally. The company offers iPhone, iPad, smartphone, tablet, and feature phone products and services under the docomo name, as well as d POINT CLUB, a point program. It also provides technical and operational services to mobile operators and other companies. In addition, the company offers LTE, FOMA, and FOMA high-speed services; docomo Wi-Fi services; VoLTE voice call services; docomo Hikari, an optical Internet service; and docomo Shop services. It serves approximately 73 million customers through advanced wireless networks, including a LTE network and LTE-advanced network. The company was founded in 1991 and is headquartered in Tokyo, Japan. NTT DOCOMO, INC. is a subsidiary of Nippon Telegraph and Telephone Corporation.

Sierra Wireless Company Profile

Sierra Wireless, Inc., together with its subsidiaries, manufactures and sells cellular wireless devices, and provide services in the wireless communications and information technology industry in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its Original Equipment Manufacturer (OEM) Solutions segment offers embedded cellular modules, short range wireless modules, global navigation satellite system modules, software, and tools to integrate wireless connectivity into various products and solutions for OEM customers, including the embedded wireless modules product portfolio; cloud-based remote device and data management solutions; and Legato, an open source Linux-based platform. It also offers professional services to OEM customers during their product development and launch process. Its Enterprise Solutions segment provides intelligent routers and gateways, as well as security and device management solutions, and professional services. Its Internet of Things (IoT) Services segment offers cellular connectivity services, which include smart subscriber identity module and core network platforms; a cloud based platform to deploy and manage IoT subscriptions, devices, and applications over the air; managed broadband cellular services, which include a combination of hardware, connectivity services, and cloud services; and specific vertical market IoT solutions that include segments, such as security, asset tracking and asset optimization. The company serves automotive, transportation, enterprise networking, energy, sales and payment, mobile computing, security, industrial monitoring, field services, residential, healthcare, public safety, retail, industrial, manufacturing, and cleantech industries, as well as financial enterprises. It serves through direct channels; and indirect channels, including OEMs, distributors, value-added resellers, and mobile network operators. The company was founded in 1993 and is headquartered in Richmond, Canada.

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