Ability (NASDAQ: ABIL) and Actua Corporation (NASDAQ:ACTA) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Ability and Actua Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ability 0 1 0 0 2.00
Actua Corporation 0 1 0 0 2.00

Ability currently has a consensus target price of $1.30, indicating a potential upside of 94.03%. Actua Corporation has a consensus target price of $17.00, indicating a potential upside of 10.39%. Given Ability’s higher probable upside, analysts clearly believe Ability is more favorable than Actua Corporation.

Profitability

This table compares Ability and Actua Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ability -109.93% -100.03% -27.91%
Actua Corporation 67.78% -5.42% -4.26%

Volatility & Risk

Ability has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500. Comparatively, Actua Corporation has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Valuation & Earnings

This table compares Ability and Actua Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ability $9.86 million 1.75 -$8.46 million N/A N/A
Actua Corporation $118.96 million 4.01 -$22.10 million $2.15 7.16

Ability has higher revenue, but lower earnings than Actua Corporation.

Insider and Institutional Ownership

4.7% of Ability shares are owned by institutional investors. Comparatively, 74.7% of Actua Corporation shares are owned by institutional investors. 10.2% of Actua Corporation shares are owned by company 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.

Summary

Actua Corporation beats Ability on 8 of the 10 factors compared between the two stocks.

Ability Company Profile

Ability Inc. is a holding company. The Company operates through its subsidiaries, Ability Computer & Software Industries Ltd. and Ability Security Systems Ltd., which provide interception, geolocation and cyber intelligence tools for security and intelligence agencies, military forces, law enforcement agencies and homeland security agencies around the world. The Company is engaged in off-air interception of voice, short message service (SMS), and data communication from both cellular and satellite communication networks, and deciphering solutions for both cellular and satellite communications. The Company’s product categories include Cellular Interception, Cellular Counter Interception, Satellite Interception, Geolocation, Cyber and Crime Prevention. Its Cellular Interception systems include Ultimate Interceptor (ULIN), IBIS, TouchDown, ACIS, AGIS-51 and 3G-Cat. Its Satellite Interception systems include IRIS, ATIS and SLIS.

Actua Corporation Company Profile

Actua Corporation, formerly ICG Group, Inc., is a multi-vertical cloud technology company. The Company operates through two segments, which include the vertical cloud segment and the vertical cloud (venture) segment. The Company’s vertical cloud-based businesses include Bolt Solutions Inc. (Bolt), Folio Dynamics Holdings Inc. (FolioDynamix), GovDelivery Holdings, Inc. (GovDelivery) and VelocityEHS Holdings, Inc. (VelocityEHS), which operate in the commercial and personal property and casualty insurance, wealth management, government communications and environmental, health and safety (EH&S) markets, respectively. The vertical cloud (venture) businesses include InstaMed Holdings, Inc. (InstaMed) and Parchment Inc. (Parchment), which operate a cloud-based healthcare payments network and an education credentials technology, respectively.

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