YuMe (NYSE: YUME) and Electronic Arts (NASDAQ:EA) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Ratings

This is a summary of current ratings and price targets for YuMe and Electronic Arts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YuMe 0 0 0 0 N/A
Electronic Arts 0 4 22 0 2.85

Electronic Arts has a consensus target price of $123.43, suggesting a potential upside of 16.42%. Given Electronic Arts’ higher possible upside, analysts clearly believe Electronic Arts is more favorable than YuMe.

Institutional and Insider Ownership

48.0% of YuMe shares are held by institutional investors. Comparatively, 93.5% of Electronic Arts shares are held by institutional investors. 29.3% of YuMe shares are held by company insiders. Comparatively, 2.6% of Electronic Arts shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

YuMe has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, Electronic Arts has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Earnings and Valuation

This table compares YuMe and Electronic Arts’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
YuMe $160.41 million 0.79 -$7.72 million $0.24 15.13
Electronic Arts $4.85 billion 6.74 $967.00 million $3.80 27.90

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

Profitability

This table compares YuMe and Electronic Arts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YuMe 5.25% 10.01% 6.37%
Electronic Arts 23.35% 28.92% 15.51%

Dividends

YuMe pays an annual dividend of $0.12 per share and has a dividend yield of 3.3%. Electronic Arts does not pay a dividend. YuMe pays out 50.0% of its earnings in the form of a dividend.

Summary

Electronic Arts beats YuMe on 13 of the 15 factors compared between the two stocks.

About YuMe

YuMe, Inc. (YuMe) is an independent provider of multi-screen video advertising technology, connecting brand advertisers, digital media property owners and consumers of video content across a range of Internet-connected devices. The Company operating segments include Domestic and International. The Company offers advertising customers end-to-end marketing solutions by combining data-driven technologies with deep insight into audience behavior. The Company also offers demand-side platform (DSP), called YuMe for Advertisers, to find relevant audiences and deliver targeted advertising, and a supply-side platform (SSP), called YuMe for Publishers (YFP 5.0), which helps aggregate audiences, define audience characteristics and offer monetization opportunities for digital media property owners. Its technologies serve the specific needs of brand advertisers and enable them to find and target brand-receptive audiences across a range of Internet connected devices and digital media properties.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed. The Company markets and sells its games and services through retail channels and through digital distribution channels. The Company’s PC games and additional content can be downloaded directly through its Origin online platform, as well as through third-party online download stores. Its mobile, tablet and PC free-to-download games and additional content are available through third-party application storefronts, such as the Apple Application Store and Google Play.

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