Reviewing Aviat Networks (NASDAQ:AVNW) and NETGEAR (NASDAQ:NTGR)

Aviat Networks (NASDAQ:AVNW) and NETGEAR (NASDAQ:NTGR) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Aviat Networks and NETGEAR, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aviat Networks	1	1	8	0	2.70
NETGEAR	1	1	2	0	2.25

Aviat Networks presently has a consensus price target of $33.14, indicating a potential upside of 56.93%. NETGEAR has a consensus price target of $36.00, indicating a potential upside of 52.09%. Given Aviat Networks’ stronger consensus rating and higher probable upside, equities analysts plainly believe Aviat Networks is more favorable than NETGEAR.

Risk and Volatility

Aviat Networks has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, NETGEAR has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Insider and Institutional Ownership

78.6% of Aviat Networks shares are owned by institutional investors. Comparatively, 83.0% of NETGEAR shares are owned by institutional investors. 5.3% of Aviat Networks shares are owned by company insiders. Comparatively, 3.1% of NETGEAR shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Aviat Networks and NETGEAR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aviat Networks	2.08%	6.89%	2.89%
NETGEAR	-3.71%	-2.74%	-1.65%

Valuation & Earnings

This table compares Aviat Networks and NETGEAR”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aviat Networks	$434.61 million	0.63	$1.34 million	$0.69	30.61
NETGEAR	$699.62 million	0.91	-$17.92 million	($0.88)	-26.90

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

Summary

Aviat Networks beats NETGEAR on 10 of the 14 factors compared between the two stocks.

About Aviat Networks

Aviat Networks, Inc. provides microwave networking and wireless access networking solutions in North America, Africa, the Middle East, Europe, Latin America, and the Asia Pacific. The company offers outdoor, indoor, and split-mount radios; microwave routers, switches, and trunking; and private LTE, virtual fiber, and element management products; and hosted software products, such as aviat design, frequency assurance software, and health assurance software. It also provides project services, which includes design and engineering, site and path surveys, assembly and integrations, project management, and install and commission; and managed services, such as network and interface monitoring, network health, onsite maintenance, and remote upgrades. In addition, the company offers support services, including extended warranty, warranty plus, provision support, and license key management, as well as instructor and virtual instructor led training, e-learning and certification services. It serves communications service providers and private network operators, including federal, state and local government agencies, transportation agencies, energy and utility companies, public safety agencies, and broadcast network operators. The company markets its products through a direct sales, service, and support organization; indirect sales channels comprising dealers, resellers, and sales representatives; and through online. Aviat Networks, Inc. company was incorporated in 2006 and is headquartered in Austin, Texas.

About NETGEAR

NETGEAR, Inc. provides connectivity solutions the Americas; Europe, the Middle East, Africa; and the Asia Pacific. The company operates in two segments, Connected Home, and NETGEAR for Business. The Connected Home segment offers Wi-Fi routers and home Wi-Fi mesh systems, Wi-Fi hotspots, digital displays, broadband modems, Wi-Fi gateways, Wi-Fi range extenders, powerline adapters, and Wi-Fi network adapters; and provides value-added service offerings, including security and privacy, technical support, and parental controls. The NETGEAR for Business segment provides pro AV Solutions; pro routers; enterprise grade cloud managed or standalone access points; general purpose ethernet switches; NETGEAR Insight remote management software; and NETGEAR engage controller. It markets and sells its products through wholesale distributors, traditional and online retailers, direct market resellers, value-added resellers, and broadband service providers, as well as through its direct online store. The company was incorporated in 1996 and is headquartered in San Jose, California.