Reviewing Vuzix (VUZI) and PC Tel (PCTI)

Vuzix (NASDAQ: VUZI) and PC Tel (NASDAQ:PCTI) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.

Insider and Institutional Ownership

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8.1% of Vuzix shares are held by institutional investors. Comparatively, 74.0% of PC Tel shares are held by institutional investors. 18.4% of Vuzix shares are held by company insiders. Comparatively, 7.5% of PC Tel shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Vuzix and PC Tel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vuzix -354.51% -123.93% -99.72%
PC Tel 4.09% 2.15% 1.86%

Earnings and Valuation

This table compares Vuzix and PC Tel’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vuzix $5.54 million 29.81 -$19.63 million ($1.02) -5.93
PC Tel $91.44 million 1.47 $3.82 million $0.10 73.90

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

Dividends

PC Tel pays an annual dividend of $0.22 per share and has a dividend yield of 3.0%. Vuzix does not pay a dividend. PC Tel pays out 220.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Vuzix has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, PC Tel has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Vuzix and PC Tel, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vuzix 0 0 3 0 3.00
PC Tel 0 1 1 0 2.50

Vuzix currently has a consensus price target of $10.50, indicating a potential upside of 73.55%. PC Tel has a consensus price target of $8.25, indicating a potential upside of 11.64%. Given Vuzix’s stronger consensus rating and higher probable upside, research analysts clearly believe Vuzix is more favorable than PC Tel.

Summary

PC Tel beats Vuzix on 9 of the 16 factors compared between the two stocks.

About Vuzix

Vuzix Corporation designs, manufactures, markets, and sells wearable display devices in the United States and internationally. The company's products are worn like eyeglasses that enable the user to view video and digital content, such as movies, computer data, the Internet, or video games. Its products include binocular wearable displays that contain two micro displays mounted in a frame attached to eyeglass-style temples or stereo headphones; monocular smart glasses products for the enterprise, industrial, and commercial markets, as well as video headphones; augmented reality products, which provide the user a live, direct or indirect, view of a physical, and real-world environment; and video viewing glasses as mobile displays for entertainment and gaming for on-the-go users, as well as support for stepping into virtual worlds, simulations, and virtual reality gaming. The company sells its products under the Vuzix brand name. Vuzix Corporation offers its products directly to consumers, as well as through specialty retailers, online retailers, distributors, resellers, and Web stores. The company was formerly known as Icuiti Corporation and changed its name to Vuzix Corporation in 2007. Vuzix Corporation was founded in 1997 and is based in West Henrietta, New York.

About PC Tel

PCTEL, Inc. (PCTEL) delivers telecom solutions. The Company operates in two segments: Connected Solutions and RF Solutions. The RF Solutions segment develops and provides test equipment, software and engineering services for wireless networks. The Connected Solutions segment designs and delivers antennas and site solutions for wireless networks globally. PCTEL antennas and site solutions support networks across the world, including Supervisory Control and Data Acquisition (SCADA) for oil, gas and utilities, fleet management, industrial operations, healthcare, small cell and network timing deployment, defense, public safety, education and broadband access. Its SeeGull flex scanning receivers are used around the world for indoor and drive test applications, including baseline testing, acceptance testing, spectrum clearing, troubleshooting and network optimization. PCTEL provides wireless network testing, commissioning, optimization, design, integration and consulting services.

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