Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) vs. China Techfaith Wireless Communication Technology (OTCMKTS:CNTFY) Head to Head Analysis

China Techfaith Wireless Communication Technology (OTCMKTS:CNTFY) and Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for China Techfaith Wireless Communication Technology and Telefonaktiebolaget LM Ericsson (publ), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Techfaith Wireless Communication Technology	0	0	0	0	N/A
Telefonaktiebolaget LM Ericsson (publ)	2	1	1	0	1.75

Telefonaktiebolaget LM Ericsson (publ) has a consensus target price of $5.90, suggesting a potential downside of 17.94%. Given Telefonaktiebolaget LM Ericsson (publ)’s higher possible upside, analysts clearly believe Telefonaktiebolaget LM Ericsson (publ) is more favorable than China Techfaith Wireless Communication Technology.

Valuation and Earnings

This table compares China Techfaith Wireless Communication Technology and Telefonaktiebolaget LM Ericsson (publ)’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Techfaith Wireless Communication Technology	N/A	N/A	N/A	N/A	N/A
Telefonaktiebolaget LM Ericsson (publ)	$249.53 billion	0.10	-$2.49 billion	($0.99)	-7.26

China Techfaith Wireless Communication Technology has higher earnings, but lower revenue than Telefonaktiebolaget LM Ericsson (publ).

Profitability

This table compares China Techfaith Wireless Communication Technology and Telefonaktiebolaget LM Ericsson (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Techfaith Wireless Communication Technology	N/A	N/A	N/A
Telefonaktiebolaget LM Ericsson (publ)	-14.13%	11.39%	3.79%

Volatility and Risk

China Techfaith Wireless Communication Technology has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500. Comparatively, Telefonaktiebolaget LM Ericsson (publ) has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Institutional & Insider Ownership

8.0% of Telefonaktiebolaget LM Ericsson (publ) shares are held by institutional investors. 33.3% of China Techfaith Wireless Communication Technology shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Telefonaktiebolaget LM Ericsson (publ) beats China Techfaith Wireless Communication Technology on 6 of the 9 factors compared between the two stocks.

About China Techfaith Wireless Communication Technology

China TechFaith Wireless Communication Technology Limited engages in the original design and development of specialized mobile handsets for consumers and enterprises in the People's Republic of China and internationally. It operates through Mobile Phone Business and Real Estate segments. The company offers handset design services through outsourcing of EMS providers who engage in assembly and manufacturing operations; and offer testing services of the assembled printed circuit boards, systems, and subsystems for Chinese mobile handset brand owners and international mobile handset brand owners. It also provides feature phones, smart phones, ruggedized phones, wireless modules, smart pads, and wireless software and applications, as well as other electronic components, such as industrial wireless devices. In addition, the company sells mobile handset products under the Tecface, 17FOX, and MOBIFOX brands. Further, it owns, develops, operates, and manages commercial real estate properties. The company was founded in 2002 and is headquartered in Beijing, the People's Republic of China.

About Telefonaktiebolaget LM Ericsson (publ)

Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions for telcom operators and enterprise customers in various sectors in North America, Europe, Latin America, the Middle East, Africa, North East Asia, South East Asia, Oceania, and India. It operates in four segments: Networks; Cloud Software and Services; Enterprise; and Other. The Networks segment offers radio access network (RAN) solutions for various network spectrum bands, including purpose-built and open RAN-prepared hardware and software. This segment also provides cloud RAN; transport solutions; passive and active antennas; and a range of service portfolios covering network deployment and support. The Cloud Software and Services segment offers core networks, business and operational support systems, network design and optimization, and managed network services. The Enterprise segment offers a global communications platform, including cloud-based unified communications as a service, contact center as a service, and communications platform as a service; enterprise wireless solutions comprising private wireless networks and wireless wan pre-packaged solutions; and technologies and new business solutions, such as mobile financial services, security solutions, and advertising services. The Other segment includes Redbee media that prepares and distributes live and video services for broadcasters, sports leagues, and communications service providers. It offers its services through wholesalers and distributors. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.