Ericsson (ERIC) vs Nokia Corporation (NOK)

Ericsson and Nokia Corporation are both Communication Equipment companies. Nokia Corporation is the larger, with a market value of $59.9B against $29.4B — 2.0× the size. Nokia Corporation trades at the lower P/E: 5.6× against 12.2×. Nokia Corporation grew revenue faster over the last twelve months: 13.9% against 2.26%. Ericsson has the higher net margin (10.6% vs 3.39%) and the higher return on invested capital (25.1% vs 2.83%). Both pay a dividend; Ericsson yields more (4.83% vs 3.91%). Across the 23 metrics below, Ericsson leads on 15 and Nokia Corporation on 8.

Valuation

Metric ERIC NOK Communication Equipment median
P/E 12.22 5.58 33.61
P/S 1.30 2.47 2.16
P/B 2.80 2.35 2.40
Price to free cash flow 10.24 94.34 25.02
EV/EBITDA 6.70 26.09 13.78
EV/Sales 1.20 2.33 2.27
Earnings yield 8.18% 17.92% (0.65%)
Free cash flow yield 9.77% 1.06% 1.61%

Profitability

Metric ERIC NOK Communication Equipment median
Gross margin 46.99% 44.36% 39.47%
Operating margin 14.52% 4.14% 2.39%
Net margin 10.61% 3.39% (0.74%)
Free cash flow margin 12.72% 2.61% 1.39%
Return on equity 0.00% 3.38% (1.91%)
Return on assets 8.76% 1.90% (0.20%)
Return on invested capital 25.09% 2.83% 0.72%

Growth

Metric ERIC NOK Communication Equipment median
Revenue growth (TTM) 2.26% 13.87% 11.48%
EPS growth (last fiscal year) 0.00% (48.00%) —
Revenue growth, 5-year CAGR (0.92%) (2.05%) 4.92%
Net income growth, 5-year CAGR 8.80% 0.00% 0.00%

Health

Metric ERIC NOK Communication Equipment median
Debt to equity 0.30 0.11 0.06
Current ratio 1.12 1.51 2.01
Net debt to EBITDA (0.50) (1.67) 0.67

Dividend

Metric ERIC NOK Communication Equipment median
Dividend yield 4.83% 3.91% 2.63%
Payout ratio 0.72 0.12 0.00

Size

Metric ERIC NOK Communication Equipment median
Market cap 29.36b 59.90b 563.45m

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