Digimarc Corporation (NASDAQ: DMRC) and ANSYS (NASDAQ:ANSS) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Institutional & Insider Ownership

52.8% of Digimarc Corporation shares are held by institutional investors. Comparatively, 96.8% of ANSYS shares are held by institutional investors. 7.5% of Digimarc Corporation shares are held by company insiders. Comparatively, 1.3% of ANSYS shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Digimarc Corporation and ANSYS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Digimarc Corporation $22.43 million 17.36 -$22.78 million ($2.41) -15.00
ANSYS $1.03 billion 10.26 $461.25 million $3.11 40.08

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

Analyst Ratings

This is a summary of recent ratings and target prices for Digimarc Corporation and ANSYS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digimarc Corporation 0 1 4 0 2.80
ANSYS 2 11 1 0 1.93

Digimarc Corporation presently has a consensus price target of $45.75, indicating a potential upside of 26.56%. ANSYS has a consensus price target of $114.65, indicating a potential downside of 8.02%. Given Digimarc Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Digimarc Corporation is more favorable than ANSYS.

Profitability

This table compares Digimarc Corporation and ANSYS’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%
ANSYS 26.37% 13.87% 11.06%

Risk and Volatility

Digimarc Corporation has a beta of -1.07, meaning that its share price is 207% less volatile than the S&P 500. Comparatively, ANSYS has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Summary

ANSYS beats Digimarc Corporation on 8 of the 13 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 ANSYS

ANSYS, Inc. (ANSYS) develops and markets engineering simulation software and services used by engineers, designers, researchers and students across a range of industries and academia, including aerospace and defense, automotive, industrial equipment, electronics, biomedical, energy, materials and chemical processing, and semiconductors. The Company focuses on the development of open and flexible solutions that enable users to analyze designs directly on the desktop, providing a common platform for product development, from design concept to final-stage testing and validation. The Company distributes its ANSYS suite of simulation technologies through a network of independent resellers and distributors, and direct sales offices in various locations. Its product portfolio consists of Simulation Platform: ANSYS Workbench, Structures, Fluids, Electronics, Semiconductors, Multiphysics, AIM, Embedded Software, Systems, Three Dimensional (3-D) Direct Modeling and Academic.

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