Head to Head Comparison: EnerNOC (ENOC) vs. Magic Software Enterprises (MGIC)

EnerNOC (NASDAQ: ENOC) and Magic Software Enterprises (NASDAQ:MGIC) are both small-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

Magic Software Enterprises pays an annual dividend of $0.26 per share and has a dividend yield of 3.2%. EnerNOC does not pay a dividend. Magic Software Enterprises pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

EnerNOC has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500. Comparatively, Magic Software Enterprises has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for EnerNOC and Magic Software Enterprises, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EnerNOC 0 4 0 0 2.00
Magic Software Enterprises 0 0 4 0 3.00

EnerNOC presently has a consensus target price of $8.56, indicating a potential upside of 11.85%. Magic Software Enterprises has a consensus target price of $10.17, indicating a potential upside of 23.98%. Given Magic Software Enterprises’ stronger consensus rating and higher possible upside, analysts clearly believe Magic Software Enterprises is more favorable than EnerNOC.

Insider & Institutional Ownership

49.7% of EnerNOC shares are held by institutional investors. Comparatively, 9.3% of Magic Software Enterprises shares are held by institutional investors. 13.4% of EnerNOC shares are held by insiders. Comparatively, 4.5% of Magic Software Enterprises shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares EnerNOC and Magic Software Enterprises’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EnerNOC N/A N/A N/A ($1.50) -5.10
Magic Software Enterprises $201.65 million 1.81 $11.90 million $0.26 31.54

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

Profitability

This table compares EnerNOC and Magic Software Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EnerNOC -66.80% -160.15% -42.76%
Magic Software Enterprises 4.77% 10.37% 6.30%

Summary

Magic Software Enterprises beats EnerNOC on 10 of the 13 factors compared between the two stocks.

About EnerNOC

EnerNOC, Inc. is a provider of energy intelligence software (EIS) and demand response solutions. The Company’s EIS provides enterprise solutions, utility solutions and energy procurement solutions. The Company’s EIS offers enterprise customers with a Software-as-a-Service (SaaS) solutions with various areas of functionalities, including energy cost visualization, budgets, forecasts and accruals; project tracking, and demand management. Its EIS provides its utility customers with a SaaS-based customer engagement platform, which collects and processes data and enables its utility customers to provide personalized communication and recommendations to their customers. Its EIS includes an energy procurement platform that helps its enterprise and utility customers. Its procurement platform offers its enterprise and utility customers with features, such as energy contracts management. Its technology includes over two components: its EIS platform and Network Operations Center (NOC).

About Magic Software Enterprises

Magic Software Enterprises Ltd. is a provider of application development, business process integration platforms, vertical software solutions and related professional services. The Company is a vendor of information technology (IT) outsourcing services. Its software technology is used by customers to develop, deploy and integrate on premise, mobile and cloud-based business. It operates through two segments: software solutions and IT professional services. The software services segment includes software technology and complementary services. The IT professional services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, and communications services and solutions. Its product portfolio includes Magic xpa Application Platform, AppBuilder Application Platform and Magic xpi Integration Platform. Its vertical software packages include Leap, Hermes Solution, HR Pulse and MBS Solution.

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