Analyzing Mattersight (MATR) and Digimarc (DMRC)

Mattersight (NASDAQ:MATR) and Digimarc (NASDAQ:DMRC) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Institutional & Insider Ownership

37.6% of Mattersight shares are held by institutional investors. Comparatively, 55.6% of Digimarc shares are held by institutional investors. 28.3% of Mattersight shares are held by insiders. Comparatively, 6.1% of Digimarc shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Mattersight and Digimarc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mattersight -22.26% N/A -29.58%
Digimarc -116.98% -37.68% -35.22%

Analyst Ratings

This is a summary of recent recommendations for Mattersight and Digimarc, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mattersight 0 3 0 0 2.00
Digimarc 0 0 4 0 3.00

Mattersight presently has a consensus price target of $3.04, suggesting a potential upside of 13.25%. Digimarc has a consensus price target of $42.75, suggesting a potential upside of 63.61%. Given Digimarc’s stronger consensus rating and higher probable upside, analysts plainly believe Digimarc is more favorable than Mattersight.

Valuation and Earnings

This table compares Mattersight and Digimarc’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mattersight $46.51 million 1.91 -$16.32 million N/A N/A
Digimarc $25.21 million 12.31 -$25.77 million ($2.44) -10.71

Mattersight has higher revenue and earnings than Digimarc.

Volatility & Risk

Mattersight has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Digimarc has a beta of -1.22, indicating that its stock price is 222% less volatile than the S&P 500.

Summary

Mattersight beats Digimarc on 7 of the 12 factors compared between the two stocks.

Mattersight Company Profile

Mattersight Corporation provides behavioral analytics services in the United States. The company provides predictive behavioral routing and workstyle, performance management, quality assurance, predictive analytics, and marketing managed services. It serves companies in the healthcare, insurance, financial service, technology, telecommunication, cable, utility, education, hospitality, and government industries. The company was formerly known as eLoyalty Corporation and changed its name to Mattersight Corporation in May 2011. Mattersight Corporation was founded in 1994 and is headquartered in Chicago, Illinois.

Digimarc Company Profile

Digimarc Corporation provides media identification and management solutions to commercial entities and government customers in the United States and internationally. The company offers Digimarc Intuitive Computing Platform, a comprehensive set of technologies for identifying, discovering, and interacting with digitally-enhanced media, which includes Digimarc Barcode, a method for imperceptibly enhancing packaging, print, images, thermal labels, audio, and other objects with data that is detected by enabled devices, such as smart phones, computers, barcode scanners, and machine-vision equipment. It also provides Digimarc Discover software that enables an ecosystem of connected devices to identify content or materials and deliver information. The company's solutions identify, track, manage, and protect content; and enable new consumer applications to access networks and information from personal computers and mobile devices. Its solutions are used in various media identification and management products and solutions, such as counterfeiting and piracy deterrence; online e-publication piracy protection; content identification and media management; authentication and monitoring; retail point of sale transaction processing; linking to networks and providing access to information; and enhanced services in support of mobile commerce. The company provides its solutions directly and through its business partners. Digimarc Corporation was founded in 2008 and is based in Beaverton, Oregon.

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