Riverbed Technology (NASDAQ: RVBD) and Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) are both mid-cap technology companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Analyst Ratings

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This is a breakdown of current ratings and recommmendations for Riverbed Technology and Telefonaktiebolaget LM Ericsson, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Riverbed Technology 0 0 0 0 N/A
Telefonaktiebolaget LM Ericsson 2 6 4 0 2.17

Telefonaktiebolaget LM Ericsson has a consensus price target of $5.59, suggesting a potential downside of 20.26%. Given Telefonaktiebolaget LM Ericsson’s higher probable upside, analysts clearly believe Telefonaktiebolaget LM Ericsson is more favorable than Riverbed Technology.

Valuation and Earnings

This table compares Riverbed Technology and Telefonaktiebolaget LM Ericsson’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Riverbed Technology N/A N/A N/A $0.44 47.70
Telefonaktiebolaget LM Ericsson $26.02 billion 0.90 $200.60 million ($0.61) -11.49

Telefonaktiebolaget LM Ericsson has higher revenue and earnings than Riverbed Technology. Telefonaktiebolaget LM Ericsson is trading at a lower price-to-earnings ratio than Riverbed Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Riverbed Technology and Telefonaktiebolaget LM Ericsson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Riverbed Technology 17.55% 24.83% 10.64%
Telefonaktiebolaget LM Ericsson -8.60% -5.67% -2.57%

Risk and Volatility

Riverbed Technology has a beta of 2.02, suggesting that its stock price is 102% more volatile than the S&P 500. Comparatively, Telefonaktiebolaget LM Ericsson has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Institutional and Insider Ownership

8.1% of Telefonaktiebolaget LM Ericsson shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Telefonaktiebolaget LM Ericsson pays an annual dividend of $0.07 per share and has a dividend yield of 1.0%. Riverbed Technology does not pay a dividend. Telefonaktiebolaget LM Ericsson pays out -11.5% of its earnings in the form of a dividend.

Summary

Telefonaktiebolaget LM Ericsson beats Riverbed Technology on 6 of the 11 factors compared between the two stocks.

Riverbed Technology Company Profile

Riverbed Technology, Inc. (Riverbed) is a provider of application performance infrastructure. The Company offers a platform to deliver, control and optimize IT resources across the hybrid enterprise. The Riverbed Application Performance Platform delivers application performance infrastructure solutions with a focus on two areas, which include application acceleration and performance management. The Wide area network (WAN) optimization for application acceleration includes Riverbed SteelHead, which provides WAN optimization solution, and Riverbed SteelFusion, which provides branch converged infrastructure. The Company’s application acceleration solutions also include Riverbed SteelApp, an application delivery controller (ADC). The Company’s performance management solution includes Riverbed SteelCentral, a performance management suite that combines its application-aware network performance management and application performance management control suite.

Telefonaktiebolaget LM Ericsson Company Profile

Telefonaktiebolaget LM Ericsson (Ericsson) provides infrastructure, services and software to the telecommunication industry and other sectors. The Company’s segments include Networks, IT & Cloud and Media. The Networks segment consists of two business units: Network Products and Network Services. The overall focus is on evolving and managing access networks, including the development of hardware and software for radio access and transport networks. The IT & Cloud business includes two business units: IT & Cloud Products and IT & Cloud Services. The focus in IT & Cloud is to help telecom operators and selected enterprises through the digital transformations ahead. It develops and delivers software-based solutions for television and media and combines a product portfolio that spans the television value chain, with systems integration and managed services. The portfolio includes compression, content publishing through set-top box or pure over-the-top, content delivery and analytics.

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