Ebix (NASDAQ: EBIX) and Tangoe (NASDAQ:TNGO) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitabiliy, dividends, risk, valuation, analyst recommendations and institutional ownership.

Dividends

Ebix pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. Tangoe does not pay a dividend. Ebix pays out 9.9% of its earnings in the form of a dividend.

Volatility and Risk

Ebix has a beta of 1.8, indicating that its stock price is 80% more volatile than the S&P 500. Comparatively, Tangoe has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Ebix and Tangoe, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ebix 0 0 1 0 3.00
Tangoe 0 2 1 0 2.33

Tangoe has a consensus target price of $6.50, suggesting a potential upside of 0.00%. Given Tangoe’s higher possible upside, analysts clearly believe Tangoe is more favorable than Ebix.

Profitability

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

Net Margins Return on Equity Return on Assets
Ebix 32.03% 22.76% 12.71%
Tangoe N/A N/A N/A

Insider & Institutional Ownership

64.3% of Ebix shares are held by institutional investors. Comparatively, 59.2% of Tangoe shares are held by institutional investors. 13.0% of Ebix shares are held by company insiders. Comparatively, 12.0% of Tangoe shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Ebix and Tangoe’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ebix $306.33 million 5.66 $111.26 million $3.03 18.15
Tangoe $219.45 million 1.15 $9.64 million N/A N/A

Ebix has higher revenue and earnings than Tangoe.

Summary

Ebix beats Tangoe on 11 of the 13 factors compared between the two stocks.

Ebix Company Profile

Ebix, Inc. (Ebix) is a supplier of software and e-commerce solutions to the insurance industry. Ebix provides application software products for the insurance industry, including carrier systems, agency systems and exchanges, as well as custom software development. Ebix conducts its operations through four channels, which include Exchanges, Carrier Systems, Broker Systems and Risk Compliance Solutions (RCS). Ebix operates data exchanges in the areas of life insurance, annuities, employee health benefits, risk management, workers compensation, and property and casualty (P&C) insurance. Ebix designs and deploys back-end systems for P&C insurance brokers across the world. Ebix also designs and deploys on-demand and back-end systems for P&C insurance companies. Ebix focus in RCS channel pertains to business process outsourcing services that include providing project management, time and material consulting to clients across the world, and claims adjudication/settlement services.

Tangoe Company Profile

Tangoe, Inc. is a provider of information technology (IT) and Telecom Expense Management (TEM) software and related services. The Company offers its services to a range of global enterprises and service providers. Its products and solutions include mobility, telecom, cloud, IT expense, strategic consulting and mobility as a service (MaaS). Its mobility solution includes expense management; procurement, logistics and activation; usage management; enterprise mobility; mobile support, and financial management. Its IT expense solution includes expense management, inventory and asset management, usage management and financial management. Its enterprise mobility and IT consulting services include strategic sourcing; strategy assessment, planning, and policy development, and implementation and transition support. The Company offers contract sourcing, strategy and policy consulting, service maturity assessment, global services benchmarking and lifecycle advisory, among others.

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