Financial Survey: Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) vs. HMS Networks AB (publ) (OTCMKTS:HMNKF)

Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) and HMS Networks AB (publ) (OTCMKTS:HMNKF) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Institutional and Insider Ownership

8.0% of Telefonaktiebolaget LM Ericsson (publ) shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Telefonaktiebolaget LM Ericsson (publ) and HMS Networks AB (publ), as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telefonaktiebolaget LM Ericsson (publ)	2	1	1	0	1.75
HMS Networks AB (publ)	0	0	0	0	N/A

Telefonaktiebolaget LM Ericsson (publ) currently has a consensus target price of $5.90, suggesting a potential downside of 18.62%. Given Telefonaktiebolaget LM Ericsson (publ)’s higher probable upside, analysts clearly believe Telefonaktiebolaget LM Ericsson (publ) is more favorable than HMS Networks AB (publ).

Valuation & Earnings

This table compares Telefonaktiebolaget LM Ericsson (publ) and HMS Networks AB (publ)’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telefonaktiebolaget LM Ericsson (publ)	$249.53 billion	0.10	-$2.49 billion	($0.99)	-7.32
HMS Networks AB (publ)	N/A	N/A	N/A	$5.61	7.54

HMS Networks AB (publ) has lower revenue, but higher earnings than Telefonaktiebolaget LM Ericsson (publ). Telefonaktiebolaget LM Ericsson (publ) is trading at a lower price-to-earnings ratio than HMS Networks AB (publ), indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Telefonaktiebolaget LM Ericsson (publ) and HMS Networks AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telefonaktiebolaget LM Ericsson (publ)	-14.13%	11.39%	3.79%
HMS Networks AB (publ)	N/A	N/A	N/A

Dividends

Telefonaktiebolaget LM Ericsson (publ) pays an annual dividend of $0.16 per share and has a dividend yield of 2.2%. HMS Networks AB (publ) pays an annual dividend of $2.25 per share and has a dividend yield of 5.3%. Telefonaktiebolaget LM Ericsson (publ) pays out -16.2% of its earnings in the form of a dividend. HMS Networks AB (publ) pays out 40.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Telefonaktiebolaget LM Ericsson (publ) beats HMS Networks AB (publ) on 7 of the 11 factors compared between the two stocks.

About Telefonaktiebolaget LM Ericsson (publ)

Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions for telcom operators and enterprise customers in various sectors in North America, Europe, Latin America, the Middle East, Africa, North East Asia, South East Asia, Oceania, and India. It operates in four segments: Networks; Cloud Software and Services; Enterprise; and Other. The Networks segment offers radio access network (RAN) solutions for various network spectrum bands, including purpose-built and open RAN-prepared hardware and software. This segment also provides cloud RAN; transport solutions; passive and active antennas; and a range of service portfolios covering network deployment and support. The Cloud Software and Services segment offers core networks, business and operational support systems, network design and optimization, and managed network services. The Enterprise segment offers a global communications platform, including cloud-based unified communications as a service, contact center as a service, and communications platform as a service; enterprise wireless solutions comprising private wireless networks and wireless wan pre-packaged solutions; and technologies and new business solutions, such as mobile financial services, security solutions, and advertising services. The Other segment includes Redbee media that prepares and distributes live and video services for broadcasters, sports leagues, and communications service providers. It offers its services through wholesalers and distributors. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.

About HMS Networks AB (publ)

HMS Networks AB (publ) engages in the provision of products that enable industrial equipment to communicate and share information worldwide. The company offers Anybus Embedded that offers multi-network connectivity with a single development project; Anybus Gateways, a gateway for connecting devices, machines, systems, or networks; Anybus Wireless that allows to connect machines and devices over Bluetooth, Wi-Fi, cellular networks, and industrial Ethernet; and Anybus Diagnostics, which offers tools and services to monitor, analyze, and troubleshoot industrial networks. It also provides Ewon Cosy, an industrial VPN device for secure remote access; Ewon Flexy, an industrial device and IIoT gateways for flexible remote access and data services; Ewon Flexy Extension Cards, which allow to keep up with the evolution of communication technologies while protecting investment in the device; and Ewon Talk2M, an industrial cloud that enables its customers to access their assets; Ewon Netbiter, a gateway to remote connectivity for energy generation systems; and Argos, a IIoT cloud dashboard, as well as offers other IIoT softwares. In addition, the company offers Intesis protocol translators, air conditioner interfaces, AC Cloud control, and ST cloud control solutions; and PC interfaces, repeaters, bridges, routers, gateways, and safety solutions under the Ixxat brand. Further, it provides Owasys, a wireless communication platforms, as well as offers brand labeling, system, software, and maintenance solutions. The company offers its solutions to device manufactures, machine builders, system integrators, and end users. HMS Networks AB (publ) was founded in 1988 and is headquartered in Halmstad, Sweden.