OptimizeRx (NASDAQ:OPRX – Get Free Report) and Magic Software Enterprises (NASDAQ:MGIC – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.
Profitability
This table compares OptimizeRx and Magic Software Enterprises’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| OptimizeRx | 4.69% | 10.61% | 7.54% |
| Magic Software Enterprises | 6.61% | 16.28% | 8.96% |
Insider and Institutional Ownership
76.5% of OptimizeRx shares are owned by institutional investors. Comparatively, 24.7% of Magic Software Enterprises shares are owned by institutional investors. 5.6% of OptimizeRx shares are owned by insiders. Comparatively, 4.5% of Magic Software Enterprises shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| OptimizeRx | 1 | 1 | 6 | 1 | 2.78 |
| Magic Software Enterprises | 0 | 2 | 1 | 0 | 2.33 |
OptimizeRx presently has a consensus target price of $17.57, suggesting a potential upside of 158.40%. Magic Software Enterprises has a consensus target price of $18.00, suggesting a potential upside of 3.57%. Given OptimizeRx’s stronger consensus rating and higher possible upside, analysts plainly believe OptimizeRx is more favorable than Magic Software Enterprises.
Risk & Volatility
OptimizeRx has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Magic Software Enterprises has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.
Valuation and Earnings
This table compares OptimizeRx and Magic Software Enterprises”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| OptimizeRx | $109.43 million | 1.17 | $5.13 million | $0.26 | 26.15 |
| Magic Software Enterprises | $603.22 million | 1.41 | $36.88 million | $0.81 | 21.46 |
Magic Software Enterprises has higher revenue and earnings than OptimizeRx. Magic Software Enterprises is trading at a lower price-to-earnings ratio than OptimizeRx, indicating that it is currently the more affordable of the two stocks.
Summary
OptimizeRx beats Magic Software Enterprises on 8 of the 15 factors compared between the two stocks.
About OptimizeRx
OptimizeRx Corporation, a digital health technology company, enables care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey. It offers various tech-enabled marketing solutions through its Artificial Intelligence-generated Dynamic Audience and Activation Platform, which enables customers to execute traditional marketing campaigns on its proprietary digital point-of-care network, as well as dynamic marketing campaigns that optimize audiences in real time to increase the value of treatment information for healthcare professionals and patients in response to clinical care events. The company was founded in 2006 and is based in Waltham, Massachusetts.
About Magic Software Enterprises
Magic Software Enterprises Ltd. provides proprietary application development, vertical software solutions, business process integration, information technologies (IT) outsourcing software services, and cloud-based services in Israel and internationally. Its Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. The company’s IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services. It also offers proprietary application platforms, such as Magic xpa for developing and deploying business applications; AppBuilder for building, deploying, and maintaining business applications; Magic xpi for application integration; Magic xpi cloud native; FactoryEye for virtualization of production data; Magic Data Management and Analytics Platform for data management; and Magic SmartUX for cross-platform mobile business applications. The company also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Cargo, a packaged software solution for managing air cargo ground handling; HR Pulse, a single-tenant software as a service tool; MBS Solution, a system for managing TV broadcast management; Nativ, a system for management of rehabilitation centers; and Mobisale, a system for sales and distribution field activities for consumer goods manufacturers and wholesalers. In addition, It provides software maintenance, support, training, and consulting services. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. The company was incorporated in 1983 and is headquartered in Or Yehuda, Israel.
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