Reviewing SPS Commerce (NASDAQ:SPSC) & UMC (OTCMKTS:UMCN)

SPS Commerce (NASDAQ:SPSC) and UMC (OTCMKTS:UMCN) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Institutional and Insider Ownership

99.0% of SPS Commerce shares are owned by institutional investors. 1.0% of SPS Commerce shares are owned by company insiders. Comparatively, 16.8% of UMC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares SPS Commerce and UMC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SPS Commerce	$637.77 million	5.33	$77.05 million	$2.23	40.39
UMC	N/A	N/A	-$180,000.00	N/A	N/A

SPS Commerce has higher revenue and earnings than UMC.

Risk & Volatility

SPS Commerce has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, UMC has a beta of 33.65, suggesting that its stock price is 3,265% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for SPS Commerce and UMC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SPS Commerce	1	8	2	1	2.25
UMC	0	0	0	0	0.00

SPS Commerce currently has a consensus price target of $106.80, indicating a potential upside of 18.57%. Given SPS Commerce’s stronger consensus rating and higher probable upside, equities research analysts plainly believe SPS Commerce is more favorable than UMC.

Profitability

This table compares SPS Commerce and UMC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SPS Commerce	11.65%	12.17%	10.14%
UMC	-1,022.22%	N/A	N/A

Summary

SPS Commerce beats UMC on 10 of the 12 factors compared between the two stocks.

About SPS Commerce

SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States and internationally. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, grocers, suppliers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment, an electronic data interchange solution that scales as a business grows, where companies use a single system to manage orders and logistics from various sales channels, including wholesale, eCommerce, and marketplaces; and Analytics product that enables organizations to enhance visibility into how products are selling through a single connection across various sales channels, including wholesale, eCommerce, and marketplaces, as well as enhances access and usage of sales and inventory data through a combination of analytics applications, network of connections, and industry-leading expertise. In addition, it offers various complimentary products, such as assortment product, which simplifies the communication of robust, accurate item data by automatically translating item attributes, and hierarchies; and community product that allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through change management and onboarding programs. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

About UMC

UMC, Inc. provides medical insurance claims coding and processing, electronic medical records storage, chargemaster review, pricing comparison, and accounts receivable management services to healthcare providers. Its customers primarily include hospitals, medical clinics, and physician practitioners in the United States. The company was formerly known as United Medicorp, Inc. and changed its name to UMC, Inc. in May 2007. UMC, Inc. was incorporated in 1989 and is based in Pampa, Texas.