Western Digital (NASDAQ:WDC) & Netlist (OTCMKTS:NLST) Critical Comparison

Netlist (OTCMKTS:NLST) and Western Digital (NASDAQ:WDC) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Risk and Volatility

Netlist has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Western Digital has a beta of 1.81, indicating that its stock price is 81% more volatile than the S&P 500.

Profitability

This table compares Netlist and Western Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Netlist	-25.96%	N/A	-97.92%
Western Digital	14.13%	24.93%	10.59%

Earnings & Valuation

This table compares Netlist and Western Digital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netlist	$147.10 million	1.28	-$53.87 million	($0.12)	-5.12
Western Digital	$10.13 billion	5.50	$1.89 billion	$6.87	23.72

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

Insider & Institutional Ownership

0.0% of Netlist shares are held by institutional investors. Comparatively, 92.5% of Western Digital shares are held by institutional investors. 4.0% of Netlist shares are held by insiders. Comparatively, 0.2% of Western Digital shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Netlist and Western Digital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Netlist	0	0	0	0	0.00
Western Digital	0	5	18	1	2.83

Western Digital has a consensus price target of $155.47, suggesting a potential downside of 4.59%. Given Western Digital’s stronger consensus rating and higher possible upside, analysts plainly believe Western Digital is more favorable than Netlist.

Summary

Western Digital beats Netlist on 14 of the 15 factors compared between the two stocks.

About Netlist

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. The company portfolio of proprietary technologies and design techniques, includes efficient planar design, alternative packaging techniques, and custom semiconductor logic, to deliver memory subsystems; and sells specialty memory modules and flash-based products for use in data center and industrial applications. It resells component products, including solid state drive (SSD), NAND flash, and dual inline memory module (DIMM) to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.

About Western Digital

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set top boxes; and flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications. The company also provides enterprise HDDs; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; and data storage platforms. In addition, it offers external HDD storage products in mobile and desktop form; client portable SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, and cameras and smart video systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field backup of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the Western Digital, SanDisk, and WD brands to original equipment manufacturers, distributors, dealers, resellers, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.