Contrasting EarthLink (ELNK) and Inventergy Global (INVT)

EarthLink (NASDAQ: ELNK) and Inventergy Global (OTCMKTS:INVT) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Insider and Institutional Ownership

88.4% of EarthLink shares are owned by institutional investors. 1.7% of EarthLink shares are owned by company insiders. Comparatively, 24.6% of Inventergy Global shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares EarthLink and Inventergy Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EarthLink -0.01% -14.46% -0.55%
Inventergy Global 2,177.99% 37.76% 23.80%

Dividends

EarthLink pays an annual dividend of $0.20 per share and has a dividend yield of 3.6%. Inventergy Global does not pay a dividend. EarthLink pays out -23.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for EarthLink and Inventergy Global, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EarthLink 0 0 1 0 3.00
Inventergy Global 0 0 0 0 N/A

EarthLink currently has a consensus price target of $10.00, suggesting a potential upside of 77.62%. Given EarthLink’s higher probable upside, research analysts clearly believe EarthLink is more favorable than Inventergy Global.

Valuation & Earnings

This table compares EarthLink and Inventergy Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EarthLink N/A N/A N/A ($0.84) -6.70
Inventergy Global $1.77 million 0.80 -$7.73 million $1.27 0.06

EarthLink has higher earnings, but lower revenue than Inventergy Global. EarthLink is trading at a lower price-to-earnings ratio than Inventergy Global, indicating that it is currently the more affordable of the two stocks.

Summary

Inventergy Global beats EarthLink on 7 of the 12 factors compared between the two stocks.

EarthLink Company Profile

EarthLink, Inc. (EarthLink), is a network, communications and information technology (IT) services provider to business and residential customers in the United States. The Company operates in two segments: Business Services and Consumer Services. EarthLink’s Business Services segment provides a range of data, voice, managed IT and equipment services to business customers. Its Consumer Services segment provides nationwide Internet access and related value-added services to residential customers. EarthLink operates a network, including approximately 28,800 route miles of fiber, 90 metro fiber rings and four enterprise-class data centers and provides Internet protocol (IP) access services to customers across more than 90% of the United States. In April 2011, EarthLink acquired One Communications Corp. (One Communications). In July 2013, Earthlink Inc completed the acquisition CenterBeam Inc.

Inventergy Global Company Profile

Inventergy Global, Inc. is an intellectual property (IP) investment and licensing company. The Company offers clients a professional corporate licensing model for IP value creation. The Company’s Technical Lead and associated group works to understand the science and/or technology behind the patents of a particular portfolio, under the review of the Legal Lead and in support of the Business team. This group coordinates the work of third party technology consultants, including technical external resources, such as technical experts, reverse engineering consultancies and other providers, to deliver inputs to the Legal and Business teams. The Legal Lead and Team manage the existing patent asset portfolio from a global perspective and also manage further prosecution of continuing patent cases. The Legal Lead also is responsible for the legal structure and legal documents of any license or negotiated settlement with prospective licensees.

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