Aviat Networks (NASDAQ:AVNW) and Optical Cable (NASDAQ:OCC) Critical Contrast

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

Insider & Institutional Ownership

13.6% of Optical Cable shares are owned by institutional investors. Comparatively, 78.6% of Aviat Networks shares are owned by institutional investors. 22.4% of Optical Cable shares are owned by company insiders. Comparatively, 5.3% of Aviat Networks 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.

Valuation & Earnings

This table compares Optical Cable and Aviat Networks”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Optical Cable	$73.04 million	1.59	-$1.46 million	$0.12	109.42
Aviat Networks	$434.61 million	0.62	$1.34 million	$0.69	30.30

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Optical Cable and Aviat Networks, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Optical Cable	1	0	0	0	1.00
Aviat Networks	1	1	8	0	2.70

Aviat Networks has a consensus target price of $33.14, suggesting a potential upside of 58.50%. Given Aviat Networks’ stronger consensus rating and higher probable upside, analysts plainly believe Aviat Networks is more favorable than Optical Cable.

Profitability

This table compares Optical Cable and Aviat Networks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Optical Cable	1.29%	5.92%	2.50%
Aviat Networks	2.08%	6.89%	2.89%

Risk & Volatility

Optical Cable has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Aviat Networks has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Summary

Aviat Networks beats Optical Cable on 11 of the 14 factors compared between the two stocks.

About Optical Cable

Optical Cable Corporation, together with its subsidiaries, engages in the manufacture and sale of fiber optic and copper data communications cabling and connectivity solutions primarily for the enterprise market in the United States and internationally. The company provides fiber optic and hybrid cables for high bandwidth transmission of data, video, and voice communications; and copper datacom cables, including unshielded and shielded twisted pair constructions. Its fiber optic connectivity products include fiber optic wall mounts, cabinet mount and rack mount enclosures, pre-terminated fiber optic enclosures, fiber optic connectors, splice trays, fiber optic jumpers, plug and play cassette modules, pre-terminated fiber optic cable assemblies, adapters, and accessories; and copper connectivity products comprising category compliant patch panels, jacks, plugs, patch cords, faceplates, surface mounted boxes, distribution and multi-media boxes, copper rack mount and wall mount enclosures, cable assemblies, cable organizers, and other wiring products for equipment rooms, telecommunications closets, data centers, and workstation applications. In addition, the company offers network, data storage, and telecommunications management systems, such as data cabinets, wall mount enclosures, horizontal and vertical cable management systems, and open frame relay racks; and datacom wiring products, including various enclosures, and modules and modular outlets for single dwelling and multiple dwelling residential uses. Further, it provides specialty fiber optic connectors and connectivity components, copper datacom connectors, and related systems and solutions for military, other harsh environment, and special applications, as well as cylindrical connector products. The company sells its products to distributors, original equipment manufacturers, value-added resellers, and end-users. Optical Cable Corporation was incorporated in 1983 and is headquartered in Roanoke, Virginia.

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.