Head-To-Head Review: Qualstar (OTCMKTS:QBAK) vs. Western Digital (NASDAQ:WDC)

Western Digital (NASDAQ:WDC) and Qualstar (OTCMKTS:QBAK) 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, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.

Risk and Volatility

Western Digital has a beta of 1.79, meaning that its share price is 79% more volatile than the S&P 500. Comparatively, Qualstar has a beta of -0.26, meaning that its share price is 126% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Digital	$9.52 billion	10.03	$1.89 billion	$9.97	28.24
Qualstar	$8.04 million	3.27	-$470,000.00	$0.41	46.49

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Western Digital and Qualstar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Digital	0	3	20	1	2.92
Qualstar	0	0	0	0	0.00

Western Digital currently has a consensus price target of $265.58, indicating a potential downside of 5.68%. Given Western Digital’s stronger consensus rating and higher possible upside, analysts clearly believe Western Digital is more favorable than Qualstar.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Western Digital	35.52%	41.53%	16.16%
Qualstar	8.35%	N/A	N/A

Insider & Institutional Ownership

92.5% of Western Digital shares are held by institutional investors. 0.2% of Western Digital shares are held by insiders. Comparatively, 37.5% of Qualstar shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Western Digital beats Qualstar on 13 of the 15 factors compared between the two stocks.

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.

About Qualstar

Qualstar Corporation engages in power solutions and data storage systems businesses worldwide. The company operates through two segments, Power Solutions and Data Storage Systems. It provides data storage systems under the Qualstar brand and power solutions under the N2Power brand. The company designs, manufactures, and sells switching power supplies that are used to convert AC line voltage to DC voltages; or DC voltages to other DC voltages for use in various electronic equipment, such as telecommunications equipment, machine tools, routers, switches, wireless systems, and gaming devices. It also supports and sells data storage devices used to store, retrieve, and manage electronic data primarily in network computing environments. The company serves original equipment manufacturers, information technology departments, and lower and middle market companies through distributor and reseller network, distributors, and independent outside sales representatives. Qualstar Corporation was founded in 1984 and is based in Camarillo, California.