Reviewing Ooma (OOMA) and Motorola Solutions (MSI)

Ooma (NYSE: OOMA) and Motorola Solutions (NYSE:MSI) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Risk & Volatility

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Ooma has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Motorola Solutions has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Ooma and Motorola Solutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ooma 0 3 2 0 2.40
Motorola Solutions 0 3 10 0 2.77

Ooma currently has a consensus price target of $14.00, indicating a potential upside of 35.27%. Motorola Solutions has a consensus price target of $114.73, indicating a potential upside of 9.77%. Given Ooma’s higher probable upside, analysts clearly believe Ooma is more favorable than Motorola Solutions.

Institutional and Insider Ownership

73.4% of Ooma shares are owned by institutional investors. Comparatively, 87.9% of Motorola Solutions shares are owned by institutional investors. 11.4% of Ooma shares are owned by insiders. Comparatively, 2.5% of Motorola Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Motorola Solutions pays an annual dividend of $2.08 per share and has a dividend yield of 2.0%. Ooma does not pay a dividend. Motorola Solutions pays out 40.0% of its earnings in the form of a dividend. Motorola Solutions has raised its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Ooma and Motorola Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ooma $114.49 million 1.72 -$13.12 million ($0.69) -15.00
Motorola Solutions $6.38 billion 2.64 -$155.00 million $5.20 20.10

Ooma has higher earnings, but lower revenue than Motorola Solutions. Ooma is trading at a lower price-to-earnings ratio than Motorola Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ooma and Motorola Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ooma -11.46% -32.40% -17.16%
Motorola Solutions -2.43% -75.81% 10.39%

Summary

Motorola Solutions beats Ooma on 11 of the 17 factors compared between the two stocks.

Ooma Company Profile

Ooma, Inc. is a United States-based company, which offers Ooma, a communications platform for small businesses and consumers. Ooma serves as a communications hub, which offers cloud-based telephony, Internet security, home monitoring and other connected services. Ooma combines PureVoice high definition (HD) call quality features with mobile applications anytime, anywhere calling. Ooma is a full router capable of prioritizing voice data and directing traffic to ensure reliable phone service. Its enterprise-grade phone service built for small business includes features, such as calling features, including unlimited calling in United States and Canada, 911 service and toll-free numbers available; office features, including virtual receptionist, extension dialing and voicemail; mobility features, including call forwarding, voicemail forwarding and multi-ring, and one-touch Internet protocol (IP) phone features, including three way conference, transfer calls and call on hold.

Motorola Solutions Company Profile

Motorola Solutions, Inc. is a provider of communication infrastructure, devices, accessories, software and services. The Company operates through two segments: Products and Services. The Company’s Products segment offers a portfolio of infrastructure, devices, accessories and software. The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities, and commercial and industrial customers operating private communications networks and manage a mobile workforce. The Company’s Services segment provides a range of service offerings for government, public safety and commercial communication networks. The Services segment product lines include Integration services, Managed & Support services, and Integrated Digital Enhanced Network (iDEN) services.

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