AltiGen Communications (OTCMKTS:ATGN) & Lumentum (NASDAQ:LITE) Critical Survey

AltiGen Communications (OTCMKTS:ATGN) and Lumentum (NASDAQ:LITE) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Volatility and Risk

AltiGen Communications has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Lumentum has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Insider and Institutional Ownership

94.1% of Lumentum shares are owned by institutional investors. 14.0% of AltiGen Communications shares are owned by insiders. Comparatively, 0.2% of Lumentum shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares AltiGen Communications and Lumentum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AltiGen Communications	18.15%	8.98%	7.47%
Lumentum	1.57%	-3.02%	-0.71%

Analyst Ratings

This is a summary of recent recommendations for AltiGen Communications and Lumentum, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AltiGen Communications	0	0	0	0	0.00
Lumentum	0	4	12	2	2.89

Lumentum has a consensus target price of $133.36, suggesting a potential downside of 22.20%. Given Lumentum’s stronger consensus rating and higher probable upside, analysts plainly believe Lumentum is more favorable than AltiGen Communications.

Valuation and Earnings

This table compares AltiGen Communications and Lumentum”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AltiGen Communications	$13.62 million	1.19	$1.56 million	$0.09	6.97
Lumentum	$1.65 billion	7.28	$25.90 million	$0.23	745.22

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

Summary

Lumentum beats AltiGen Communications on 11 of the 15 factors compared between the two stocks.

About AltiGen Communications

Altigen Communications, Inc. designs, develops, markets, and supports integrated communications solutions worldwide. It provides MaxCS IP-PBX, a software-based phone system that provides customers with business communications solutions; MaxACD Voice Over Internet Protocol (VoIP) Contact Center, a software-based automatic call distribution engine, which offers call routing and call distribution options; MaxMobile that extends a set of business PBX functionality to smart phone devices; and MaxCommunicator, a Windows-based desktop application, which provides call control and visual voice mail management to the desktop. The company offers MaxAgent, a Windows-based desktop application to bring call control and workgroup information to call center agents; MaxSupervisor, a Windows-based desktop application for call center supervisors; and MaxACD for Skype, a call center solution. In addition, it provides hosted services, which include hosted IP PBX, Skype for Business, session initiation protocol trunk, call center solution, voice and video calling, conference calling, and various long-distance services; and software assurance services, which offer customers with software updates, patches, new releases, and technical support for the applications they are licensed to use. The company serves financial services, healthcare, retail, and business services industries through a channel of distributors and resellers. Altigen Communications, Inc. was incorporated in 1994 and is based in Milpitas, California.

About Lumentum

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates through two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables. It offers tunable transponders, transceivers, and transmitter modules; tunable lasers, receivers, and modulators; transport products, such as reconfigurable optical add/drop multiplexers, amplifiers, and optical channel monitors, as well as components, including 980nm, multi-mode, and Raman pumps; and switches, attenuators, photodetectors, gain flattening filters, isolators, wavelength-division multiplexing filters, arrayed waveguide gratings, multiplex/de-multiplexers, and integrated passive modules. This segment also provides Super Transport Blade, which integrates optical transport functions into a single-slot blade; vertical-cavity surface-emitting lasers; directly modulated and electro-absorption modulated lasers; and laser illumination sources for 3D sensing systems. It serves customers in telecommunications, data communications, and consumer and industrial markets. The Commercial Lasers segment offers diode-pumped solid-state, fiber, diode, direct-diode, and gas lasers, such as argon-ion and helium-neon lasers for use in original equipment manufacturer applications. It serves customers in markets and applications, such as sheet metal processing, general manufacturing, biotechnology, solar cell processing, graphics and imaging, remote sensing, and precision machining. Lumentum Holdings Inc. was incorporated in 2015 and is headquartered in San Jose, California.