Critical Survey: Franklin Wireless (FKWL) vs. ADTRAN (ADTN)

Franklin Wireless (OTCMKTS:FKWL) and ADTRAN (NASDAQ:ADTN) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Franklin Wireless and ADTRAN, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franklin Wireless 0 0 0 0 N/A
ADTRAN 0 4 3 0 2.43



ADTRAN has a consensus target price of $18.45, suggesting a potential upside of 56.62%. Given ADTRAN’s higher probable upside, analysts clearly believe ADTRAN is more favorable than Franklin Wireless.

Volatility and Risk

Franklin Wireless has a beta of -0.04, suggesting that its stock price is 104% less volatile than the S&P 500. Comparatively, ADTRAN has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Dividends

ADTRAN pays an annual dividend of $0.36 per share and has a dividend yield of 3.1%. Franklin Wireless does not pay a dividend. ADTRAN pays out 40.4% of its earnings in the form of a dividend.

Profitability

This table compares Franklin Wireless and ADTRAN’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franklin Wireless -4.13% -8.43% -5.65%
ADTRAN -3.94% -2.20% -1.61%

Institutional and Insider Ownership

9.8% of Franklin Wireless shares are held by institutional investors. Comparatively, 94.6% of ADTRAN shares are held by institutional investors. 36.9% of Franklin Wireless shares are held by company insiders. Comparatively, 2.5% of ADTRAN shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Franklin Wireless and ADTRAN’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Franklin Wireless $30.07 million 0.86 -$2.09 million N/A N/A
ADTRAN $666.58 million 0.84 $23.84 million $0.89 13.24

ADTRAN has higher revenue and earnings than Franklin Wireless.

Summary

ADTRAN beats Franklin Wireless on 10 of the 13 factors compared between the two stocks.

About Franklin Wireless

Franklin Wireless Corp. provides intelligent wireless solutions. Its products include mobile hotspots, routers, and modems, as well as hardware and software products that support machine-to-machine (M2M) applications and the Internet of Things (IoT). The company's M2M and IoT solutions include embedded modules, and modems and gateways built to deliver connectivity supporting various spectrums of applications. Its products are used to solve wireless connectivity challenges in various vertical markets, including video surveillance, digital signage, home security, oil and gas exploration, kiosks, fleet management, smart grid, vehicle diagnostics, telematics, and others. The company directly markets its products to wireless operators, as well as indirectly through strategic partners and distributors located primarily in the United States, South America, the Caribbean, Europe, the Middle East, Africa, and Asia. Franklin Wireless Corp. was founded in 1981 and is headquartered in San Diego, California.

About ADTRAN

ADTRAN, Inc. provides networking and communications equipment worldwide. The company operates through two segments, Network Solutions and Services & Support. It offers access and aggregation solutions, including network management and subscriber services control and orchestration software within a SD-access architecture; SDN-controlled programmable network elements; fiber to the premises and fiber to the node (FTTN) multi-service access nodes (MSAN); fiber aggregation and FTTN MSAN; fiber to the distribution point optical network units; optical line terminals; optical networking edge aggregation; and IP digital subscriber line access multiplexers. The company's access and aggregation solutions also comprise cabinet and outside-plant enclosures and services; pluggable optical transceivers, cables, and other miscellaneous materials; and other products and services. In addition, it provides customer devices comprising broadband customer premise solutions, such as passive optical network and point-to-point Ethernet optical network terminals; radio frequency over glass micro nodes; residential and business gateways; Wi-Fi access points and related powering and switching infrastructure; enterprise session border controllers; carrier Ethernet services termination devices; voice over Internet protocol media gateways; and other products and services. Further, the company offers time division multiplexed and asynchronous transfer mode based aggregation systems and customer devices; HDSL, ADSL, and other technologies; and other products and services. Additionally, it provides planning, engineering, program management, maintenance, support, installation, commissioning, and implementation services. The company serves communications service providers, distributed enterprises and small and medium-sized businesses, public and private enterprises, and individual users. ADTRAN, Inc. was founded in 1985 and is headquartered in Huntsville, Alabama.

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