Ribbon Communications (RBBN) and Leidos (LDOS) Head to Head Analysis

Ribbon Communications (NASDAQ: RBBN) and Leidos (NYSE:LDOS) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.

Profitability

This table compares Ribbon Communications and Leidos’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ribbon Communications -17.48% 2.70% 1.84%
Leidos 3.95% 17.90% 6.70%

Valuation & Earnings

This table compares Ribbon Communications and Leidos’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ribbon Communications $329.94 million 2.25 -$35.25 million $0.07 101.71
Leidos $10.17 billion 0.88 $366.00 million $3.72 15.86

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

Analyst Ratings

This is a breakdown of current ratings for Ribbon Communications and Leidos, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ribbon Communications 1 1 3 0 2.40
Leidos 0 2 6 0 2.75

Ribbon Communications presently has a consensus price target of $7.81, suggesting a potential upside of 9.73%. Leidos has a consensus price target of $73.88, suggesting a potential upside of 25.21%. Given Leidos’ stronger consensus rating and higher possible upside, analysts plainly believe Leidos is more favorable than Ribbon Communications.

Insider & Institutional Ownership

81.3% of Ribbon Communications shares are owned by institutional investors. Comparatively, 73.1% of Leidos shares are owned by institutional investors. 1.8% of Ribbon Communications shares are owned by company insiders. Comparatively, 1.1% of Leidos shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Ribbon Communications has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500. Comparatively, Leidos has a beta of 1.58, indicating that its stock price is 58% more volatile than the S&P 500.

Dividends

Leidos pays an annual dividend of $1.28 per share and has a dividend yield of 2.2%. Ribbon Communications does not pay a dividend. Leidos pays out 34.4% of its earnings in the form of a dividend.

Summary

Leidos beats Ribbon Communications on 10 of the 16 factors compared between the two stocks.

Ribbon Communications Company Profile

Ribbon Communications Inc. provides networked solutions in the United States, Europe, the Middle East, Africa, Japan, rest of the Asia Pacific, and internationally. The company offers service provider solutions, such as fixed network transformation, mobile network evolution, secure network interconnects, network functions virtualization, cloud communications, and communications security solutions that enables to modernize communications networks, as well as provides secure real-time communications software, hardware, and cloud-native solutions. Its enterprise solutions include unified communications (UC), Nortel private branch exchange evolution, UC security, contact centers, Microsoft Skype for Business, session management, and security and cloud communications solutions that allows enterprises to connect securely to SIP trunks and modernize communications networks. The company also offers solution and business consulting, system integration, deployment, and managed care services; and support services, such as managing software updates, hardware maintenance, hardware spare services and managed spares programs, and emergency assistance during disaster recovery. It serves telecommunications, wireless and cable service providers, and enterprises through direct sales and indirect channels. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Westford, Massachusetts.

Leidos Company Profile

Leidos Holdings, Inc. provides services and solutions in the defense, intelligence, civil, and health markets primarily in the United States. The company operates through three segments: Defense Solutions, Civil, and Health. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. intelligence community, Department of Defense, military services, the U.S. Department of Homeland Security, and government agencies of U.S. allies abroad, as well as other federal, civilian, and commercial customers in national security industry. Its solutions include technology, intelligence systems, command and control, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to Air Navigation Service providers, including the Federal Aviation Administration, Transportation Security Administration, and airport operators; vehicle and cargo inspection system, which enables the scanning of vehicles and cargo that produces a image using a low radiation dose; IT solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; federal environment and infrastructure; and logistics services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people worldwide, including complex systems integration, managed health services, enterprise IT transformation, and life sciences services. The company was founded in 1969 and is headquartered in Reston, Virginia.

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