Digimarc (NASDAQ: DMRC) and Open Text (NASDAQ:OTEX) are both industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.
This table compares Digimarc and Open Text’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings for Digimarc and Open Text, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Digimarc presently has a consensus target price of $43.00, indicating a potential upside of 60.45%. Open Text has a consensus target price of $44.89, indicating a potential upside of 27.56%. Given Digimarc’s higher possible upside, equities research analysts clearly believe Digimarc is more favorable than Open Text.
Earnings and Valuation
This table compares Digimarc and Open Text’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Digimarc||$25.21 million||12.60||-$25.77 million||($2.44)||-10.98|
|Open Text||$2.29 billion||4.11||$1.03 billion||$4.01||8.78|
Open Text has higher revenue and earnings than Digimarc. Digimarc is trading at a lower price-to-earnings ratio than Open Text, indicating that it is currently the more affordable of the two stocks.
Open Text pays an annual dividend of $0.61 per share and has a dividend yield of 1.7%. Digimarc does not pay a dividend. Open Text pays out 15.2% of its earnings in the form of a dividend.
Risk and Volatility
Digimarc has a beta of -1.02, indicating that its share price is 202% less volatile than the S&P 500. Comparatively, Open Text has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500.
Insider & Institutional Ownership
51.5% of Digimarc shares are owned by institutional investors. Comparatively, 67.7% of Open Text shares are owned by institutional investors. 7.5% of Digimarc shares are owned by company insiders. Comparatively, 10.6% of Open Text shares are owned 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.
Open Text beats Digimarc on 11 of the 14 factors compared between the two stocks.
Digimarc Corporation provides media identification and management solutions to commercial entities and government customers in the United States and internationally. The company offers Digimarc Intuitive Computing Platform, a comprehensive set of technologies for identifying, discovering, and interacting with digitally-enhanced media, which includes Digimarc Barcode, a method for imperceptibly enhancing packaging, print, images, thermal labels, audio, and other objects with data that is detected by enabled devices, such as smart phones, computers, barcode scanners, and machine-vision equipment. It also provides Digimarc Discover software that enables an ecosystem of connected devices to identify content or materials and deliver information. The company's solutions identify, track, manage, and protect content; and enable new consumer applications to access networks and information from personal computers and mobile devices. Its solutions are used in various media identification and management products and solutions, such as counterfeiting and piracy deterrence; online e-publication piracy protection; content identification and media management; authentication and monitoring; retail point of sale transaction processing; linking to networks and providing access to information; and enhanced services in support of mobile commerce. The company provides its solutions directly and through its business partners. Digimarc Corporation was founded in 2008 and is based in Beaverton, Oregon.
About Open Text
Open Text Corporation provides a suite of software products and services that assist organizations in finding, utilizing, and sharing business information from various devices. The company offers content solutions that provide content and records management, archiving, and email management and capture solutions, as well as Core, a software as a service based multi-tenant cloud solution; business process management for analyzing, automating, monitoring, and optimizing structured business processes; and customer experience management products, which offer Web content management, digital asset management, customer communications management, social software, and portal. Its products also include business network solutions comprising business-to-business integration, fax solutions, and secure messaging; analytics solutions, including embedded reporting and visualization, and big data analysis; and discovery solutions consisting of search, semantic navigation, and auto classification, as well as InfoFusion to deal with the issue of ?information silos' resulting from disconnected information sources across the enterprise. In addition, the company provides customer support programs that include access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble tickets. Further, it offers professional services, such as consulting and learning services relating for the implementation, training, and integration of its product offerings into the customer's systems; and cloud services that allow its customers to make use of its OpenText software, services, and content over Internet enabled networks. The company serves organizations, mid-market companies, and government agencies worldwide. It has strategic partnerships with SAP SE, Microsoft Corporation, Oracle Corporation, Accenture plc, Deloitte Consulting LLP, and others. Open Text Corporation was founded in 1991 and is headquartered in Waterloo, Canada.
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