Reviewing Direct Digital (NASDAQ:DRCT) and Stran & Company, Inc. (NASDAQ:SWAG)

Direct Digital (NASDAQ:DRCT) and Stran & Company, Inc. (NASDAQ:SWAG) are both small-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Volatility & Risk

Direct Digital has a beta of 5.44, indicating that its share price is 444% more volatile than the S&P 500. Comparatively, Stran & Company, Inc. has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500.

Valuation and Earnings

This table compares Direct Digital and Stran & Company, Inc.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Direct Digital	$34.69 million	0.07	-$18.95 million	($201.62)	-0.02
Stran & Company, Inc.	$116.19 million	0.33	-$750,000.00	$0.01	202.00

Stran & Company, Inc. has higher revenue and earnings than Direct Digital. Direct Digital is trading at a lower price-to-earnings ratio than Stran & Company, Inc., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Direct Digital and Stran & Company, Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Direct Digital	-65.75%	N/A	-59.57%
Stran & Company, Inc.	0.33%	1.26%	0.73%

Insider & Institutional Ownership

4.0% of Direct Digital shares are owned by institutional investors. Comparatively, 56.4% of Stran & Company, Inc. shares are owned by institutional investors. 25.6% of Direct Digital shares are owned by insiders. Comparatively, 49.6% of Stran & Company, Inc. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Direct Digital and Stran & Company, Inc., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Direct Digital	1	1	0	0	1.50
Stran & Company, Inc.	1	0	0	0	1.00

Summary

Stran & Company, Inc. beats Direct Digital on 10 of the 12 factors compared between the two stocks.

About Direct Digital

Direct Digital Holdings, Inc. operates as an end-to-end full-service programmatic advertising platform. The company's platform primarily focuses on providing advertising technology, data-driven campaign optimization, and other solutions to underserved and less efficient markets on both the buy- and sell-side of the digital advertising ecosystem. It serves various industry verticals, such as travel, healthcare, education, financial services, consumer products, and other sectors with a focus on small and mid-sized businesses. The company was founded in 2018 and is headquartered in Houston, Texas.

About Stran & Company, Inc.

Stran & Co., Inc. engages in the provision of promotional marketing and branded merchandise services. It offers promotional product, custom manufacturing, custom packaging, warehousing, and program management. The company was founded by Andrew Shape and Andrew Stranberg in 1994 and is headquartered in Quincy, MA.