WidePoint (NYSE:WYY) & Digimarc (NASDAQ:DMRC) Critical Review

Digimarc (NASDAQ:DMRC) and WidePoint (NYSE:WYY) are both small-cap industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Digimarc and WidePoint, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digimarc 0 2 0 0 2.00
WidePoint 0 0 0 0 N/A

Digimarc currently has a consensus target price of $23.00, suggesting a potential downside of 40.35%. Given Digimarc’s higher possible upside, research analysts clearly believe Digimarc is more favorable than WidePoint.

Profitability

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

Net Margins Return on Equity Return on Assets
Digimarc -140.61% -67.33% -55.92%
WidePoint 0.74% 4.40% 1.63%

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digimarc $22.99 million 25.69 -$32.84 million N/A N/A
WidePoint $101.72 million 0.57 $230,000.00 N/A N/A

WidePoint has higher revenue and earnings than Digimarc.

Insider & Institutional Ownership

44.2% of Digimarc shares are owned by institutional investors. Comparatively, 19.6% of WidePoint shares are owned by institutional investors. 5.5% of Digimarc shares are owned by insiders. Comparatively, 5.9% of WidePoint shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Digimarc has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, WidePoint has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Summary

WidePoint beats Digimarc on 7 of the 11 factors compared between the two stocks.

About Digimarc

Digimarc Corporation provides media identification and management solutions to government and commercial customers in the United States and internationally. The company offers Digimarc Platform for the identification, discovery, and verification of digitally-enhanced media, which includes Digimarc Barcode, an imperceptible data carrier for identifying the object; Digimarc Discover, a software for relevant devices to discover objects, such as decode data from that carrier; and Digimarc Verify, a suite of verification and quality control tools used to assess signal quality and validate data at critical stages of production. Its solutions are used in various media identification and management products and solutions, such as retail point of sale transaction processing; track and trace of products within the supply chain; quality control in manufacturing processes; inventory management and planogram compliance; sorting of consumer packaged goods in recycling streams; counterfeiting and piracy deterrence; online e-publication piracy protection; content identification and media management; authentication and monitoring; 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 WidePoint

WidePoint Corporation provides trusted mobility management solutions to the government and commercial sectors in North America and Europe. It offers federally certified secure identity management and communications solutions through a proprietary portal. The company provides telecom lifecycle management, mobile and identity management, and digital billing communications and analytics solutions. It also offers professional services to its federally certified software solutions. WidePoint Corporation was incorporated in 1997 and is headquartered in Fairfax, Virginia.

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