Head-To-Head Contrast: Motorola Solutions (MSI) & West (WSTC)

Motorola Solutions (NYSE: MSI) and West (NASDAQ:WSTC) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Dividends

Motorola Solutions pays an annual dividend of $1.88 per share and has a dividend yield of 2.0%. West pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. Motorola Solutions pays out 48.1% of its earnings in the form of a dividend. West pays out 17.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Motorola Solutions has raised its dividend for 6 consecutive years. Motorola Solutions is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Motorola Solutions and West, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Motorola Solutions 0 3 9 0 2.75
West 0 5 0 0 2.00

Motorola Solutions currently has a consensus target price of $94.36, indicating a potential upside of 1.06%. West has a consensus target price of $24.50, indicating a potential upside of 4.26%. Given West’s higher possible upside, analysts clearly believe West is more favorable than Motorola Solutions.

Earnings & Valuation

This table compares Motorola Solutions and West’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Motorola Solutions $6.04 billion 2.51 $560.00 million $3.91 23.88
West N/A N/A N/A $2.52 9.33

Motorola Solutions has higher revenue and earnings than West. West 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 Motorola Solutions and West’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Motorola Solutions 10.51% -92.09% 10.40%
West 7.79% N/A 5.18%

Institutional & Insider Ownership

87.9% of Motorola Solutions shares are held by institutional investors. Comparatively, 67.4% of West shares are held by institutional investors. 2.5% of Motorola Solutions shares are held by insiders. Comparatively, 4.6% of West shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Motorola Solutions beats West on 9 of the 13 factors compared between the two stocks.

About Motorola Solutions

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.

About West

West Corporation is a provider of communication and network infrastructure services. The Company helps its clients communicate, collaborate and connect with their audiences through a portfolio of solutions that include unified communications services, safety services, and interactive services, such as automated notifications, specialized agent services and telecom services. The Company’s segments include Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes carrier services, government solutions and advanced services; Interactive Services, including outbound (proactive notifications-voice, text/short messaging service (SMS) and chat), inbound speech solutions (interactive voice response or IVR), Web, mobile and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation.

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