MDC Partners (NASDAQ: MDCA) and Millennial Media (NYSE:MM) are both small-cap business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitabiliy, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares MDC Partners and Millennial Media’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MDC Partners -2.48% -3.65% 1.15%
Millennial Media -23.47% -26.25% -19.24%

Institutional & Insider Ownership

86.1% of MDC Partners shares are owned by institutional investors. 3.4% of MDC Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

MDC Partners pays an annual dividend of $0.21 per share and has a dividend yield of 2.0%. Millennial Media does not pay a dividend. MDC Partners pays out -30.9% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares MDC Partners and Millennial Media’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MDC Partners $1.42 billion 0.42 $149.12 million ($0.68) -15.22
Millennial Media N/A N/A N/A N/A N/A

MDC Partners has higher revenue and earnings than Millennial Media.

Analyst Ratings

This is a breakdown of recent ratings and target prices for MDC Partners and Millennial Media, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MDC Partners 0 4 3 0 2.43
Millennial Media 0 0 0 0 N/A

MDC Partners currently has a consensus price target of $11.83, suggesting a potential upside of 14.33%. Given MDC Partners’ higher probable upside, equities analysts plainly believe MDC Partners is more favorable than Millennial Media.

Summary

MDC Partners beats Millennial Media on 10 of the 10 factors compared between the two stocks.

MDC Partners Company Profile

MDC Partners Inc. is a provider of global marketing, advertising, activation, communications and strategic consulting solutions. The Company and its subsidiary agencies (Partner Firms) deliver a range of customized services. The Company’s segments include Reportable Segment, All Other and Corporate. The Reportable segment consists of the Company’s integrated advertising, media and public relations service companies. The All Other segment consists of the companies that provide the Company’s specialist marketing offerings, such as direct marketing, sales promotion, market research, strategic communications, database and customer relationship management, data analytics and insights, corporate identity, and design and branding. The Reportable segment includes the operations of various companies, such as Allison & Partners, Anomaly, Crispin Porter + Bogusky, Doner, Forsman & Bodenfors, Hunter PR, kbs, MDC Media Partners and 72andSunny.

Millennial Media Company Profile

Millennial Media, Inc. is an independent mobile advertising marketplace delivering products and services to advertisers and developers. The Company offers advertisers a suite of solutions that allow them to reach and connect with the target audiences across screens, from smartphones, tablets and other mobile devices to PCs. The Company offers developers the ability to maximize the advertising revenue and acquire new users for apps. Its advertiser and developer solutions support all mobile operating systems, including Apple iOS, Android, Windows Phone and BlackBerry. For clients who want a higher degree of customer service, the Company offers its managed media services with dedicated account teams. For its clients who want to interact with it on a more automated basis, the Company offers tools that allow advertisers to buy its ad supply in a programmatic fashion through its ad exchange and developers the opportunity to manage and monetize the ad inventory through its supply side tool.

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