Neustar (NYSE: NSR) and Black Box Corporation (NASDAQ:BBOX) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitabiliy, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Dividends

Black Box Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 6.0%. Neustar does not pay a dividend. Black Box Corporation pays out -104.3% of its earnings in the form of a dividend.

Profitability

This table compares Neustar and Black Box Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neustar 15.03% 32.93% 13.97%
Black Box Corporation -0.83% 7.74% 2.54%

Institutional and Insider Ownership

90.7% of Neustar shares are owned by institutional investors. Comparatively, 94.8% of Black Box Corporation shares are owned by institutional investors. 2.9% of Neustar shares are owned by insiders. Comparatively, 3.7% of Black Box Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Neustar and Black Box Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Neustar $1.22 billion 1.52 $473.09 million $3.27 10.20
Black Box Corporation $855.73 million 0.14 $31.73 million ($0.46) -17.28

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

Risk & Volatility

Neustar has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Black Box Corporation has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Neustar and Black Box Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neustar 0 3 0 0 2.00
Black Box Corporation 0 0 1 0 3.00

Neustar presently has a consensus target price of $29.50, suggesting a potential downside of 11.54%. Black Box Corporation has a consensus target price of $10.00, suggesting a potential upside of 25.79%. Given Black Box Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Black Box Corporation is more favorable than Neustar.

Summary

Neustar beats Black Box Corporation on 8 of the 15 factors compared between the two stocks.

Neustar Company Profile

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

Black Box Corporation Company Profile

Black Box Corporation is a technology solutions provider. The Company is engaged in designing, building, managing and securing the information technology (IT) infrastructure. Offerings under the Company’s Products platform include IT infrastructure, specialty networking, multimedia and keyboard/video/mouse (KVM) switching. Offerings under its Services platform include unified communications, data infrastructure and managed services. It conducts business globally and manages its business on a geographic-service type basis consisting of four segments: North America Products, North America Services, International Products and International Services. The offerings of its Products platform are distributed through value-added resellers, direct marketing manufacturers, mass merchandisers, Web retailers and others. The offerings of its Services platform are distributed through value-added resellers, manufacturers and large system integrators, among others.

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