MAM Software Group (NASDAQ: MAMS) and CDK Global (NASDAQ:CDK) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Dividends

CDK Global pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. MAM Software Group does not pay a dividend. CDK Global pays out 28.0% of its earnings in the form of a dividend.

Institutional & Insider Ownership

31.0% of MAM Software Group shares are owned by institutional investors. Comparatively, 85.0% of CDK Global shares are owned by institutional investors. 39.6% of MAM Software Group shares are owned by insiders. Comparatively, 0.4% of CDK Global shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

MAM Software Group has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500. Comparatively, CDK Global has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares MAM Software Group and CDK Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MAM Software Group 14.49% 51.17% 15.36%
CDK Global 13.31% 204.80% 14.06%

Earnings and Valuation

This table compares MAM Software Group and CDK Global’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MAM Software Group $31.72 million 2.99 $4.32 million $0.39 19.85
CDK Global $2.22 billion 4.10 $582.40 million $2.00 32.44

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for MAM Software Group and CDK Global, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MAM Software Group 0 1 0 0 2.00
CDK Global 0 2 2 0 2.50

MAM Software Group presently has a consensus price target of $8.00, suggesting a potential upside of 3.36%. CDK Global has a consensus price target of $72.33, suggesting a potential upside of 11.49%. Given CDK Global’s stronger consensus rating and higher possible upside, analysts clearly believe CDK Global is more favorable than MAM Software Group.

Summary

CDK Global beats MAM Software Group on 12 of the 16 factors compared between the two stocks.

About MAM Software Group

MAM Software Group, Inc. (MAM) is a technology holding company. The Company is a provider of cloud-based business and on premise management solutions for the auto parts, tires and vertical distribution industries. Its segments include MAM UK and MAM NA. It operates through three subsidiaries: MAM Software, Inc. (MAM NA), MAM Software Limited (MAM Ltd.) and Origin Software Solutions Ltd. (Origin) (MAM Ltd. and Origin are collectively referred to as MAM UK). The Company provides software, information and related services to businesses engaged in the automotive aftermarket in the United States, Canada, the United Kingdom and Ireland. In the United Kingdom Market, it also provides management solutions to businesses involved in the wholesale of construction materials. Its products and services include business management systems, information products, online services, and customer support and consulting and training.

About CDK Global

CDK Global, Inc. provides integrated information technology and digital marketing solutions. The Company’s segments include Retail Solutions North America, Advertising North America and CDK International. Through its Retail Solutions North America segment, the Company provides technology-based solutions, including automotive Website platforms, that help automotive retailers, original equipment manufacturers (OEMs) and other industry participants manage the acquisition, sale, financing, insuring, parts supply, repair and maintenance of vehicles. Through its Advertising North America segment, the Company provides advertising solutions, including management of digital advertising spend, for OEMs and automotive retailers. As of June 30, 2016, through its CDK International segment, it provided technology-based solutions similar to the retail solutions provided in its Retail Solutions North America segment in approximately 100 countries outside of the United States and Canada.

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