Contrasting MRV Communications (MRVC) & DSP Group (NASDAQ:DSPG)

MRV Communications (NASDAQ: MRVC) and DSP Group (NASDAQ:DSPG) 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 analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Risk and Volatility

MRV Communications has a beta of -1.88, indicating that its stock price is 288% less volatile than the S&P 500. Comparatively, DSP Group has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Earnings and Valuation

This table compares MRV Communications and DSP Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MRV Communications $80.75 million 0.84 -$5.04 million ($1.29) -7.73
DSP Group $133.28 million 1.95 $4.18 million $0.13 90.00

DSP Group has higher revenue and earnings than MRV Communications. MRV Communications is trading at a lower price-to-earnings ratio than DSP Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

40.9% of MRV Communications shares are owned by institutional investors. Comparatively, 75.8% of DSP Group shares are owned by institutional investors. 5.5% of MRV Communications shares are owned by company insiders. Comparatively, 6.0% of DSP Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares MRV Communications and DSP Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MRV Communications -10.97% -17.74% -8.56%
DSP Group 2.40% 3.47% 2.74%

Analyst Recommendations

This is a breakdown of recent recommendations for MRV Communications and DSP Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MRV Communications 0 0 1 0 3.00
DSP Group 0 2 5 0 2.71

MRV Communications presently has a consensus target price of $14.00, indicating a potential upside of 40.35%. DSP Group has a consensus target price of $14.17, indicating a potential upside of 21.08%. Given MRV Communications’ stronger consensus rating and higher probable upside, equities research analysts clearly believe MRV Communications is more favorable than DSP Group.

Summary

DSP Group beats MRV Communications on 11 of the 13 factors compared between the two stocks.

About MRV Communications

MRV Communications, Inc. (MRV) is a supplier of communications solutions to telecommunications service providers, enterprises and governments throughout the world. The Company’s products enable customers to provide high-bandwidth data, and video services and mobile communications services. The Company operates through Network Equipment segment. Its Network Equipment segment designs, manufactures, sells and services equipment used by commercial customers, governments and telecommunications service providers. Its products include switches, optical transport platforms, physical layer products and out-of-band management products, and specialized networking products. MRV markets and sells its products, through a range of channels, which include a direct sales force, manufacturers’ representatives, value-added-resellers, distributors and systems integrators. The Network Equipment business includes two business units: Optical Communications Systems division and Appointech, Inc.

About DSP Group

DSP Group, Inc. is a global provider of wireless and audio chipset solutions for converged communications. Delivering semiconductor system solutions with software and hardware reference designs, the Company enables original equipment manufacturers, original design manufacturers, consumer electronics manufacturers and service providers to develop new products. Its segments include Home, Office and Mobile. The Home segment includes wireless chipset solutions for converged communication at home. The Office segment offers solution for Voice-over-Internet protocol (VoIP) office products, including office solutions that provide businesses with VoIP terminals with converged voice and data applications. The Mobile segment offers products for the mobile market that provides voice enhancement, always-on and far-end noise elimination targeted for mobile phone and mobile headsets and wearable devices that incorporate its noise suppression and voice quality enhancement HDClear technology.

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