Financial Survey: Nokia (NYSE:NOK) vs. Ribbon Communications (NASDAQ:RBBN)

Nokia (NYSE:NOK) and Ribbon Communications (NASDAQ:RBBN) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Profitability

This table compares Nokia and Ribbon Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nokia	3.49%	9.83%	5.53%
Ribbon Communications	1.96%	19.91%	6.98%

Insider and Institutional Ownership

5.3% of Nokia shares are held by institutional investors. Comparatively, 70.9% of Ribbon Communications shares are held by institutional investors. 4.0% of Ribbon Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Nokia and Ribbon Communications”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nokia	$22.50 billion	2.36	$736.54 million	$0.14	65.99
Ribbon Communications	$797.64 million	0.30	$39.64 million	$0.08	17.00

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

Volatility & Risk

Nokia has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Ribbon Communications has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Nokia and Ribbon Communications, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nokia	3	5	15	1	2.58
Ribbon Communications	1	1	4	0	2.50

Nokia currently has a consensus target price of $13.57, indicating a potential upside of 46.93%. Ribbon Communications has a consensus target price of $3.30, indicating a potential upside of 142.65%. Given Ribbon Communications’ higher possible upside, analysts plainly believe Ribbon Communications is more favorable than Nokia.

Summary

Nokia beats Ribbon Communications on 9 of the 15 factors compared between the two stocks.

About Nokia

Nokia Oyj provides mobile, fixed, and cloud network solutions worldwide. The company operates through four segments: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies. The company provides fixed networking solutions, such as fiber and copper-based access infrastructure, in-home Wi-Fi solutions, and cloud and virtualization services; IP networking solutions, including IP access, aggregation, and edge and core routing for residential, mobile, enterprise and cloud applications; optical networks solutions that provides optical transport networks for metro, regional, and long-haul applications, and subsea applications; and submarine networks for undersea cable transmission. It serves its products and services to communications service providers, webscales and hyperscalers, digital industries, and government. The company also offers mobile technology products and services for radio access networks and microwave radio links for transport networks, network management solutions, as well as network planning, optimization, network deployment, and technical support services. In addition, it offers cloud and network services, including core network solutions, such as voice and packet core; business applications, such as security, automation, and monetization; cloud and cognitive services; and enterprise solutions, including private wireless and industrial automation. Further, the company licenses intellectual property, including patents, technologies, and the Nokia brand. Nokia Oyj was founded in 1865 and is headquartered in Espoo, Finland.

About Ribbon Communications

Ribbon Communications Inc. provides communications technology in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It operates through two segments, Cloud and Edge, and IP Optical Networks. The Cloud and Edge segment provides software and hardware products, solutions, and services for voice over internet protocol communications, voice over long-term evolution, and voice over 5G communications, and unified communications and collaboration. It also offers session border controllers; and network transformation products, such as signaling products, call controllers, media gateways, and application servers. This segment serves private, public, or hybrid cloud infrastructures, as well as data centers, enterprise premises, and service provider networks. The IP Optical Networks segment provides hardware and software products and solutions for IP networking, switching, routing, and optical transport for technologies, such as 5G, distributed cloud computing, and corresponding applications. It also offers multiple solutions, including 5G-native solutions for mobile-backhaul, metro and edge aggregation, core networking, data center interconnect, multi-service access, and transport solutions for wholesale carriers. This segment serves utilities, government, defense, finance, transportation, and education and research industries, as well as service providers and enterprises. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Plano, Texas.