Equinix (NASDAQ: EQIX) and j2 Global (NASDAQ:JCOM) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitabiliy, institutional ownership, earnings, risk and analyst recommendations.

Earnings and Valuation

This table compares Equinix and j2 Global’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Equinix $3.72 billion 9.22 $1.54 billion $2.79 157.72
j2 Global $928.42 million 4.46 $375.89 million $3.04 28.24

Equinix has higher revenue and earnings than j2 Global. j2 Global is trading at a lower price-to-earnings ratio than Equinix, indicating that it is currently the more affordable of the two stocks.

Dividends

Equinix pays an annual dividend of $8.00 per share and has a dividend yield of 1.8%. j2 Global pays an annual dividend of $1.50 per share and has a dividend yield of 1.7%. Equinix pays out 286.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. j2 Global pays out 49.3% of its earnings in the form of a dividend.

Profitability

This table compares Equinix and j2 Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equinix 5.38% 5.88% 2.12%
j2 Global 15.98% 26.41% 12.52%

Analyst Ratings

This is a summary of recent recommendations and price targets for Equinix and j2 Global, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equinix 0 4 14 0 2.78
j2 Global 0 1 3 0 2.75

Equinix currently has a consensus target price of $456.82, suggesting a potential upside of 3.81%. j2 Global has a consensus target price of $97.25, suggesting a potential upside of 13.28%. Given j2 Global’s higher possible upside, analysts clearly believe j2 Global is more favorable than Equinix.

Institutional and Insider Ownership

97.4% of Equinix shares are owned by institutional investors. 0.6% of Equinix shares are owned by company insiders. Comparatively, 5.2% of j2 Global shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Equinix has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, j2 Global has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

About Equinix

Equinix, Inc. (Equinix) connects businesses with partners and customers worldwide through a global platform of data centers. The Company connects approximately 4000 customers, across the Americas, Europe, Middle East and Africa (EMEA) and Asia-Pacific. Platform Equinix combines international business exchange (IBX) data centers, a global footprint and ecosystems. The Company offers each customer a choice of business partners and solutions based on their colocation, interconnection and managed IT service needs. Equinix offers customers direct interconnection to an aggregation of bandwidth providers, including the Internet Service Providers (ISPs), broadband access networks (DSL/cable) and international carriers. Its customers include carriers and other bandwidth providers, cloud and information technology (IT) services providers, content providers, financial companies and global enterprises. In July 2014, it acquired ALOG Data Centers of Brazil S.A.

About j2 Global

j2 Global, Inc. is a provider of services delivered through the Internet. The Company provides cloud services to businesses of all sizes, from individuals to enterprises. The Company operates in two segments: Business Cloud Services and Digital Media. The Company’s Digital Media business segment consists of the Web properties and business operations of Ziff Davis, Inc. (Ziff Davis). The Company‚Äôs cloud services and solutions include fax, voice and unified communications, email and customer relationship management, online backup, global network and operations, and customer support services. In February 2013, it acquired IGN Entertainment, Inc. On November 9, 2012, the Company acquired Ziff Davis. Effective March 18, 2013, it acquired MetroFax Inc. In April 2013, the Company acquired Backup Connect BV.

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