DigitalGlobe (NYSE: DGI) and Cubic Corporation (NYSE:CUB) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Profitability

This table compares DigitalGlobe and Cubic Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DigitalGlobe 0.64% 2.40% 0.97%
Cubic Corporation -2.20% -4.74% -2.22%

Analyst Recommendations

This is a summary of current ratings and recommmendations for DigitalGlobe and Cubic Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DigitalGlobe 0 4 1 0 2.20
Cubic Corporation 0 0 4 0 3.00

DigitalGlobe currently has a consensus target price of $33.90, suggesting a potential downside of 3.14%. Cubic Corporation has a consensus target price of $52.25, suggesting a potential upside of 20.39%. Given Cubic Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Cubic Corporation is more favorable than DigitalGlobe.

Insider & Institutional Ownership

96.3% of DigitalGlobe shares are owned by institutional investors. Comparatively, 88.8% of Cubic Corporation shares are owned by institutional investors. 1.9% of DigitalGlobe shares are owned by company insiders. Comparatively, 7.9% of Cubic Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DigitalGlobe $809.90 million 2.69 $402.60 million $0.02 1,750.88
Cubic Corporation $1.45 billion 0.81 $53.94 million ($1.19) -36.47

DigitalGlobe has higher revenue, but lower earnings than Cubic Corporation. Cubic Corporation is trading at a lower price-to-earnings ratio than DigitalGlobe, indicating that it is currently the more affordable of the two stocks.

Dividends

Cubic Corporation pays an annual dividend of $0.27 per share and has a dividend yield of 0.6%. DigitalGlobe does not pay a dividend. Cubic Corporation pays out -22.7% of its earnings in the form of a dividend.

Risk & Volatility

DigitalGlobe has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Cubic Corporation has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Summary

DigitalGlobe beats Cubic Corporation on 8 of the 15 factors compared between the two stocks.

DigitalGlobe Company Profile

DigitalGlobe, Inc. is a provider of Earth imagery, data and analysis. The Company’s imagery solutions and other services support a range of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration and infrastructure management. The Company’s imagery solutions and other services are sourced from its own satellite constellation and third-party providers. The Company sells its products and services through a combination of direct and indirect channels, consisting of a global network of resellers, strategic partners and direct enterprise sales to its United States Government and Diversified Commercial customer groups. The Company offers products consisting of imagery from its constellation of satellites, and provides geospatial products and services. The Company processes its imagery to varying levels according to its customers’ specifications and delivers its products using the distribution method.

Cubic Corporation Company Profile

Cubic Corporation (Cubic) designs, integrates and operates systems, products and services that provide situational awareness for its customers in the transportation and defense industries. The Company operates in three business segments across the global transportation and defense markets, which include Cubic Transportation Systems (CTS), Cubic Global Defense (CGD) and Cubic Global Defense Services (CGD Services). The Company’s CTS segment is a systems integrator of payment and information technology and services for travel solutions. The Company’s CGD Systems is focused on two primary lines of business: training systems and secure communications (SC) products. The Company’s CGD Services segment is a provider of training, operations, intelligence, maintenance, technical and other support services to the United States government and its agencies and allied nations. It also provides cross-domain hardware solutions to address multi-level security challenges across common networks.

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