Digimarc Corporation (NASDAQ: DMRC) and Great Elm Capital Group (NASDAQ:GEC) are both small-cap industrial products companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Earnings & Valuation

This table compares Digimarc Corporation and Great Elm Capital Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Digimarc Corporation $22.43 million 17.60 -$22.78 million ($2.41) -15.21
Great Elm Capital Group $4.93 million 17.18 -$7.25 million $3.21 1.14

Great Elm Capital Group has higher revenue, but lower earnings than Digimarc Corporation. Digimarc Corporation is trading at a lower price-to-earnings ratio than Great Elm Capital Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

52.8% of Digimarc Corporation shares are held by institutional investors. Comparatively, 39.6% of Great Elm Capital Group shares are held by institutional investors. 7.5% of Digimarc Corporation shares are held by company insiders. Comparatively, 6.6% of Great Elm Capital Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Digimarc Corporation and Great Elm Capital Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digimarc Corporation 0 1 4 0 2.80
Great Elm Capital Group 0 0 0 0 N/A

Digimarc Corporation presently has a consensus price target of $45.75, suggesting a potential upside of 24.83%. Given Digimarc Corporation’s higher possible upside, research analysts clearly believe Digimarc Corporation is more favorable than Great Elm Capital Group.

Profitability

This table compares Digimarc Corporation and Great Elm Capital Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digimarc Corporation -107.49% -32.18% -30.22%
Great Elm Capital Group N/A -28.99% -21.24%

Summary

Digimarc Corporation beats Great Elm Capital Group on 6 of the 11 factors compared between the two stocks.

About Digimarc Corporation

Digimarc Corporation (Digimarc) enables governments and enterprises to give digital identities to media and objects that computers can sense and recognize. The Company’s Digimarc Discover, Digimarc Barcode and Intuitive Computing Platform are designed to optimize the identification of consumer brand impressions, facilitating mobile-centric shopping. The Company operates through media management solutions segment. The Company’s platform includes means to embed Digimarc Barcodes, invisible and inaudible barcode-like information that is recognizable by smartphones, industrial scanners, and other computer interfaces into various forms of media content, including consumer product packaging. Its Digimarc Barcodes has a range of applications, including facilitating scanning of products at retail checkout, as well as engagement with smartphone-equipped consumers. The Digimarc Barcode allows automatic identification of media without visible computer codes, such as traditional barcodes.

About Great Elm Capital Group

Great Elm Capital Group, Inc., formerly Unwired Planet, Inc., is a holding company. The Company makes investments in businesses and assets in various industries. The Company’s investment for long-term value creation is in the asset management business. The Company continues to explore other opportunities in the investment management business, including other business development companies (BDCs) that trade at a discount to their net asset value. The Company intends to build a diversified investment company consisting of the following three business lines: investment management, financial products and merchant banking. It is embarking on a program of creating bespoke financial products and creating a pipeline of acquisition opportunities. The Company’s subsidiary is Great Elm Capital Corporation (GECC).

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