Analyzing Finjan (FNJN) and InterDigital (IDCC)

InterDigital (NASDAQ: IDCC) and Finjan (NASDAQ:FNJN) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, risk, profitability, analyst recommendations, valuation, earnings and dividends.

Insider and Institutional Ownership

74.1% of InterDigital shares are held by institutional investors. Comparatively, 44.1% of Finjan shares are held by institutional investors. 2.0% of InterDigital shares are held by insiders. Comparatively, 8.8% of Finjan shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for InterDigital and Finjan, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InterDigital 0 0 4 0 3.00
Finjan 0 0 2 0 3.00

InterDigital currently has a consensus target price of $95.00, suggesting a potential upside of 11.37%. Finjan has a consensus target price of $5.00, suggesting a potential upside of 69.49%. Given Finjan’s higher possible upside, analysts plainly believe Finjan is more favorable than InterDigital.

Valuation and Earnings

This table compares InterDigital and Finjan’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
InterDigital $532.94 million 5.56 $174.29 million $6.06 14.08
Finjan $50.48 million 1.62 $22.81 million $0.35 8.43

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

Volatility and Risk

InterDigital has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Finjan has a beta of -0.73, suggesting that its stock price is 173% less volatile than the S&P 500.

Profitability

This table compares InterDigital and Finjan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InterDigital 32.42% 25.85% 12.64%
Finjan N/A 95.86% 47.19%

Dividends

InterDigital pays an annual dividend of $1.40 per share and has a dividend yield of 1.6%. Finjan does not pay a dividend. InterDigital pays out 23.1% of its earnings in the form of a dividend.

Summary

InterDigital beats Finjan on 10 of the 15 factors compared between the two stocks.

InterDigital Company Profile

InterDigital, Inc. designs and develops technologies that enable and enhance wireless communications in the United States and internationally. It offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. The company develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, and 4G wireless networks and mobile terminal devices; and other wireless technologies related to Wi-Fi, WLAN, WMAN, and WRAN. It also provides interoperability and scalability solutions through oneMPOWER platform; and common interface to multiple service providers. The company's patented technologies are used in various products, including mobile devices comprising cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment consisting of base stations; components, dongles, and modules for wireless devices; and Internet of Things devices and software platforms. As of December 31, 2017, it had a portfolio of approximately 19,000 patents and patent applications related to the fundamental technologies that enable wireless communications. InterDigital, Inc. was founded in 1972 and is headquartered in Wilmington, Delaware.

Finjan Company Profile

Finjan Holdings, Inc., a cybersecurity company, provides intellectual property licensing and enforcement services in the United States and internationally. The company owns a portfolio of patents related to software and hardware technologies that proactively detect malicious code and thereby protects end users from identity and data theft, spyware, malware, phishing, Trojans, and other Web and network threats. Its patented technologies are used in specific cybersecurity technology areas, including endpoint/cloud software, Web gateway/Internet infrastructure, networking equipment markets, and mobile security. The company's technology scans and repels the latest and unknown threats to network, Web, and endpoint devices on a real-time basis. It also develops mobile security applications; invests in cybersecurity technologies and intellectual property; and provides cyber risk and cyber security advisory services provides. Finjan Holdings, Inc. was founded in 1997 and is headquartered in East Palo Alto, California.

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