CDNS vs. ERIC: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at CDNS and ERIC, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Profile
CDNS is a standard domestic listing, while ERIC trades as an American Depositary Receipt (ADR), offering U.S. investors access to its foreign-listed shares.
| Symbol | CDNS | ERIC |
|---|---|---|
| Company Name | Cadence Design Systems, Inc. | Telefonaktiebolaget LM Ericsson (publ) |
| Country | United States | Sweden |
| GICS Sector | Information Technology | Information Technology |
| GICS Industry | Software | Communications Equipment |
| Market Capitalization | 81.91 billion USD | 31.33 billion USD |
| Exchange | NasdaqGS | NasdaqGS |
| Listing Date | June 10, 1987 | August 24, 1981 |
| Security Type | Common Stock | ADR |
Historical Performance
This chart compares the performance of CDNS and ERIC by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period. Data is adjusted for dividends and splits.
Historical Performance at a Glance
| Symbol | CDNS | ERIC |
|---|---|---|
| 5-Day Price Return | -4.06% | -2.52% |
| 13-Week Price Return | -13.07% | 19.93% |
| 26-Week Price Return | -5.67% | 6.94% |
| 52-Week Price Return | 0.84% | 2.84% |
| Month-to-Date Return | -10.79% | -5.41% |
| Year-to-Date Return | 0.56% | 0.82% |
| 10-Day Avg. Volume | 1.69M | 4.85M |
| 3-Month Avg. Volume | 1.80M | 5.91M |
| 3-Month Volatility | 32.03% | 40.60% |
| Beta | 1.05 | 0.73 |
Profitability
Return on Equity (TTM)
CDNS
21.59%
Software Industry
- Max
- 65.88%
- Q3
- 22.54%
- Median
- 10.46%
- Q1
- -6.54%
- Min
- -41.05%
CDNS’s Return on Equity of 21.59% is on par with the norm for the Software industry, indicating its profitability relative to shareholder equity is typical for the sector.
ERIC
26.66%
Communications Equipment Industry
- Max
- 31.28%
- Q3
- 24.67%
- Median
- 13.12%
- Q1
- 4.60%
- Min
- -12.73%
In the upper quartile for the Communications Equipment industry, ERIC’s Return on Equity of 26.66% signals a highly effective use of shareholder capital to drive profitability compared to most of its peers.
Net Profit Margin (TTM)
CDNS
20.35%
Software Industry
- Max
- 53.50%
- Q3
- 20.30%
- Median
- 9.60%
- Q1
- -4.98%
- Min
- -41.00%
A Net Profit Margin of 20.35% places CDNS in the upper quartile for the Software industry, signifying strong profitability and more effective cost management than most of its peers.
ERIC
10.26%
Communications Equipment Industry
- Max
- 28.72%
- Q3
- 14.02%
- Median
- 5.41%
- Q1
- 2.50%
- Min
- -13.11%
ERIC’s Net Profit Margin of 10.26% is aligned with the median group of its peers in the Communications Equipment industry. This indicates its ability to convert revenue into profit is typical for the sector.
Operating Profit Margin (TTM)
CDNS
28.50%
Software Industry
- Max
- 61.99%
- Q3
- 23.67%
- Median
- 10.93%
- Q1
- -3.57%
- Min
- -40.19%
An Operating Profit Margin of 28.50% places CDNS in the upper quartile for the Software industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
ERIC
14.74%
Communications Equipment Industry
- Max
- 33.69%
- Q3
- 15.81%
- Median
- 6.02%
- Q1
- 3.00%
- Min
- -4.94%
ERIC’s Operating Profit Margin of 14.74% is around the midpoint for the Communications Equipment industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | CDNS | ERIC |
|---|---|---|
| Return on Equity (TTM) | 21.59% | 26.66% |
| Return on Assets (TTM) | 11.44% | 8.77% |
| Net Profit Margin (TTM) | 20.35% | 10.26% |
| Operating Profit Margin (TTM) | 28.50% | 14.74% |
| Gross Profit Margin (TTM) | 85.54% | 47.62% |
Financial Strength
Current Ratio (MRQ)
CDNS
3.05
Software Industry
- Max
- 4.01
- Q3
- 2.27
- Median
- 1.50
- Q1
- 1.03
- Min
- 0.25
CDNS’s Current Ratio of 3.05 is in the upper quartile for the Software industry. This signifies a strong liquidity position, suggesting the company is well-equipped to cover its immediate liabilities compared to its peers.
ERIC
1.17
Communications Equipment Industry
- Max
- 3.28
- Q3
- 2.10
- Median
- 1.52
- Q1
- 1.17
- Min
- 0.91
ERIC’s Current Ratio of 1.17 aligns with the median group of the Communications Equipment industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio (MRQ)
CDNS
0.48
Software Industry
- Max
- 2.04
- Q3
- 0.86
- Median
- 0.29
- Q1
- 0.00
- Min
- 0.00
CDNS’s Debt-to-Equity Ratio of 0.48 is typical for the Software industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
ERIC
0.43
Communications Equipment Industry
- Max
- 1.44
- Q3
- 0.96
- Median
- 0.43
- Q1
- 0.21
- Min
- 0.00
ERIC’s Debt-to-Equity Ratio of 0.43 is typical for the Communications Equipment industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
Interest Coverage Ratio (TTM)
CDNS
39.06
Software Industry
- Max
- 89.65
- Q3
- 33.82
- Median
- 1.59
- Q1
- -10.48
- Min
- -71.23
CDNS’s Interest Coverage Ratio of 39.06 is in the upper quartile for the Software industry, signifying a strong and healthy capacity to meet its interest payments from operating profits.
ERIC
3.82
Communications Equipment Industry
- Max
- 55.49
- Q3
- 34.19
- Median
- 8.92
- Q1
- 3.73
- Min
- -9.94
ERIC’s Interest Coverage Ratio of 3.82 is positioned comfortably within the norm for the Communications Equipment industry, indicating a standard and healthy capacity to cover its interest payments.
Financial Strength at a Glance
| Symbol | CDNS | ERIC |
|---|---|---|
| Current Ratio (MRQ) | 3.05 | 1.17 |
| Quick Ratio (MRQ) | 2.49 | 0.94 |
| Debt-to-Equity Ratio (MRQ) | 0.48 | 0.43 |
| Interest Coverage Ratio (TTM) | 39.06 | 3.82 |
Growth
Revenue Growth
EPS Growth
Dividend
Dividend Yield (TTM)
CDNS
0.00%
Software Industry
- Max
- 0.34%
- Q3
- 0.17%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
CDNS currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
ERIC
3.06%
Communications Equipment Industry
- Max
- 2.99%
- Q3
- 2.30%
- Median
- 0.91%
- Q1
- 0.00%
- Min
- 0.00%
ERIC’s Dividend Yield of 3.06% is exceptionally high, placing it well above the typical range for the Communications Equipment industry. While this may seem attractive, an unusually high yield can sometimes be a warning sign, reflecting a falling stock price or market concerns about the dividend’s sustainability.
Dividend Payout Ratio (TTM)
CDNS
0.00%
Software Industry
- Max
- 12.76%
- Q3
- 6.56%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
CDNS has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
ERIC
45.50%
Communications Equipment Industry
- Max
- 111.16%
- Q3
- 61.16%
- Median
- 30.78%
- Q1
- 0.00%
- Min
- 0.00%
ERIC’s Dividend Payout Ratio of 45.50% is within the typical range for the Communications Equipment industry, suggesting a balanced approach between shareholder payouts and company reinvestment.
Dividend at a Glance
| Symbol | CDNS | ERIC |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 3.06% |
| Dividend Payout Ratio (TTM) | 0.00% | 45.50% |
Valuation
Price-to-Earnings Ratio (TTM)
CDNS
77.52
Software Industry
- Max
- 142.78
- Q3
- 72.24
- Median
- 36.21
- Q1
- 24.24
- Min
- 4.55
A P/E Ratio of 77.52 places CDNS in the upper quartile for the Software industry. This high valuation relative to peers suggests the market holds elevated expectations for the company’s future growth.
ERIC
12.35
Communications Equipment Industry
- Max
- 74.67
- Q3
- 56.42
- Median
- 31.00
- Q1
- 15.93
- Min
- 3.89
In the lower quartile for the Communications Equipment industry, ERIC’s P/E Ratio of 12.35 suggests the stock may be undervalued compared to its peers, potentially presenting an attractive entry point for investors.
Price-to-Sales Ratio (TTM)
CDNS
15.78
Software Industry
- Max
- 20.79
- Q3
- 12.71
- Median
- 6.75
- Q1
- 4.56
- Min
- 0.87
CDNS’s P/S Ratio of 15.78 is in the upper echelon for the Software industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
ERIC
1.27
Communications Equipment Industry
- Max
- 11.84
- Q3
- 5.68
- Median
- 2.55
- Q1
- 1.24
- Min
- 0.40
ERIC’s P/S Ratio of 1.27 aligns with the market consensus for the Communications Equipment industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
Price-to-Book Ratio (MRQ)
CDNS
18.41
Software Industry
- Max
- 30.49
- Q3
- 14.84
- Median
- 8.09
- Q1
- 4.32
- Min
- 0.38
CDNS’s P/B Ratio of 18.41 is in the upper tier for the Software industry. This indicates that investors are paying a premium relative to the company’s net assets, a valuation that hinges on its ability to generate superior profits.
ERIC
2.55
Communications Equipment Industry
- Max
- 6.02
- Q3
- 6.01
- Median
- 3.83
- Q1
- 2.41
- Min
- 0.42
ERIC’s P/B Ratio of 2.55 is within the conventional range for the Communications Equipment industry. This shows a balanced market view, where the stock’s price is neither at a significant premium nor a discount to the book value of its peers.
Valuation at a Glance
| Symbol | CDNS | ERIC |
|---|---|---|
| Price-to-Earnings Ratio (TTM) | 77.52 | 12.35 |
| Price-to-Sales Ratio (TTM) | 15.78 | 1.27 |
| Price-to-Book Ratio (MRQ) | 18.41 | 2.55 |
| Price-to-Free Cash Flow Ratio (TTM) | 55.62 | 10.01 |