QUALCOMM (NASDAQ: QCOM) and Motorola Solutions (NYSE:MSI) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, earnings and analyst recommendations.

Earnings & Valuation

This table compares QUALCOMM and Motorola Solutions’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
QUALCOMM $22.57 billion 3.41 $7.15 billion $2.61 19.96
Motorola Solutions $6.19 billion 2.21 $1.60 billion $3.79 22.24

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

Volatility & Risk

QUALCOMM has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Motorola Solutions has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.

Dividends

QUALCOMM pays an annual dividend of $2.28 per share and has a dividend yield of 4.4%. Motorola Solutions pays an annual dividend of $1.88 per share and has a dividend yield of 2.2%. QUALCOMM pays out 87.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Motorola Solutions pays out 49.6% of its earnings in the form of a dividend. QUALCOMM has increased its dividend for 6 consecutive years and Motorola Solutions has increased its dividend for 6 consecutive years.

Insider & Institutional Ownership

77.0% of QUALCOMM shares are held by institutional investors. Comparatively, 87.7% of Motorola Solutions shares are held by institutional investors. 0.2% of QUALCOMM shares are held by insiders. Comparatively, 2.5% of Motorola Solutions shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for QUALCOMM and Motorola Solutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QUALCOMM 1 16 11 0 2.36
Motorola Solutions 0 3 8 0 2.73

QUALCOMM presently has a consensus price target of $64.27, indicating a potential upside of 23.38%. Motorola Solutions has a consensus price target of $93.91, indicating a potential upside of 11.41%. Given QUALCOMM’s higher probable upside, equities research analysts plainly believe QUALCOMM is more favorable than Motorola Solutions.

Profitability

This table compares QUALCOMM and Motorola Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QUALCOMM 17.26% 19.64% 10.95%
Motorola Solutions 10.38% -93.44% 10.07%

Summary

QUALCOMM beats Motorola Solutions on 10 of the 16 factors compared between the two stocks.

About QUALCOMM

QUALCOMM Incorporated is engaged in the development and commercialization of a digital communication technology called code division multiple access (CDMA). The Company is engaged in the development and commercialization of the orthogonal frequency division multiple access (OFDMA) family of technologies, including long-term evolution (LTE), which is an Orthogonal Frequency Division Multiplexing (OFDM)-based standard that uses OFDMA and single-carrier Frequency Division Multiple Access (FDMA), for cellular wireless communication applications. The Company’s segments include QCT (Qualcomm CDMA Technologies), QTL (Qualcomm Technology Licensing) and QSI (Qualcomm Strategic Initiatives). The Company also develops and commercializes a range of other technologies used in handsets and tablets that contribute to end user demand. The Company’s products principally consist of integrated circuits (chips or chipsets) and system software used in mobile devices and in wireless networks.

About Motorola Solutions

Motorola Solutions, Inc. is a provider of communication infrastructure, devices, accessories, software and services. The Company operates through two segments: Products and Services. The Company’s Products segment offers a portfolio of infrastructure, devices, accessories and software. The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers operating private communications networks and manage a mobile workforce. The Company’s Services segment provides a range of service offerings for government, public safety and commercial communication networks. The Services segment product lines include Integration services, Managed & Support services, and Integrated Digital Enhanced Network (iDEN) services.

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