Head-To-Head Survey: Ebix (EBIX) & Digimarc (DMRC)

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Ebix (NASDAQ: DMRC) and Digimarc (NASDAQ:DMRC) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.

Institutional and Insider Ownership

67.9% of Ebix shares are owned by institutional investors. Comparatively, 55.6% of Digimarc shares are owned by institutional investors. 13.5% of Ebix shares are owned by insiders. Comparatively, 6.1% of Digimarc shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Ebix and Digimarc’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ebix $363.97 million 6.76 $100.61 million $3.17 24.65
Digimarc $25.21 million 14.16 -$25.77 million ($2.44) -12.32

Ebix has higher revenue and earnings than Digimarc. Digimarc is trading at a lower price-to-earnings ratio than Ebix, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ebix and Digimarc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ebix 24.67% 19.99% 9.11%
Digimarc -116.98% -37.68% -35.22%

Volatility & Risk

Ebix has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, Digimarc has a beta of -1.19, indicating that its stock price is 219% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Ebix and Digimarc, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ebix 0 0 4 0 3.00
Digimarc 0 0 4 0 3.00

Ebix presently has a consensus price target of $104.33, suggesting a potential upside of 33.50%. Digimarc has a consensus price target of $42.75, suggesting a potential upside of 42.26%. Given Digimarc’s higher probable upside, analysts plainly believe Digimarc is more favorable than Ebix.

Dividends

Ebix pays an annual dividend of $0.30 per share and has a dividend yield of 0.4%. Digimarc does not pay a dividend. Ebix pays out 9.5% of its earnings in the form of a dividend.

Summary

Ebix beats Digimarc on 11 of the 14 factors compared between the two stocks.

About Ebix

Ebix, Inc. provides software and e-commerce solutions to insurance, finance, and healthcare industries. It offers software development, customization, and consulting services to various entities in the insurance industry, including carriers, brokers, exchanges, and standard making bodies. The company operates data exchanges in the areas of life insurance, annuities, employee health benefits, risk management, workers compensation, insurance underwriting, and property and casualty (P&C) insurance. It also focuses on designing and deploying back-end systems, such as eGlobal, which targets multinational P&C insurance brokers; WinBeat that targets P&C brokers in the Australian and New Zealand markets; and EbixASP, a system for the P&C insurance brokers in the United States. In addition, the company offers business process outsourcing services that include providing domain intensive project management, time, and material based consulting engagements to clients; the creation and tracking of certificates of insurance issued in the United States and Australian markets; and the provision of claims adjudication and settlement, call center, and back office support, as well as a software-based service for the issuance of certificates of insurance and a service to track certificates of insurance for corporate clients in the United States and Australia. Further, the company offers carrier systems, which pertains to the designing and deploying on-demand back-end systems for P&C insurance companies. The company was formerly known as Delphi Systems, Inc. and changed its name to Ebix, Inc. in December 2003. Ebix, Inc. was founded in 1976 and is headquartered in Johns Creek, Georgia.

About Digimarc

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.

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