Contrasting Magic Software Enterprises (NASDAQ:MGIC) and Elcom International (OTCMKTS:ELCO)

Elcom International (OTCMKTS:ELCO) and Magic Software Enterprises (NASDAQ:MGIC) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Insider and Institutional Ownership

24.7% of Magic Software Enterprises shares are owned by institutional investors. 13.6% of Elcom International shares are owned by company insiders. Comparatively, 4.5% of Magic Software Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Elcom International has a beta of -0.12, suggesting that its share price is 112% less volatile than the S&P 500. Comparatively, Magic Software Enterprises has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Earnings & Valuation

This table compares Elcom International and Magic Software Enterprises”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elcom International	N/A	N/A	N/A	N/A	N/A
Magic Software Enterprises	$603.22 million	1.41	$36.88 million	$0.81	21.46

Magic Software Enterprises has higher revenue and earnings than Elcom International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Elcom International	N/A	N/A	N/A
Magic Software Enterprises	6.61%	16.28%	8.96%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Elcom International and Magic Software Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elcom International	0	0	0	0	0.00
Magic Software Enterprises	0	2	1	0	2.33

Magic Software Enterprises has a consensus price target of $18.00, suggesting a potential upside of 3.57%. Given Magic Software Enterprises’ stronger consensus rating and higher possible upside, analysts plainly believe Magic Software Enterprises is more favorable than Elcom International.

Summary

Magic Software Enterprises beats Elcom International on 9 of the 10 factors compared between the two stocks.

About Elcom International

Elcom International Inc. provides cloud based e-procurement solutions worldwide. It offers Procure to Pay solutions to publish and manage supplier content, connect to buyers, and analyze spend and procurement processes; eInvoicing solutions to send and receive eInvoices with supplier adoption guaranteed; and sourcing functions to investigate potential suppliers on a local and global basis. The company also provides services for buyers, including catalog processing, development of punchout catalogs, and to integrate Elcom’s PECOS solution into existing purchasing processes; and services for suppliers, such as onboarding of new suppliers to utilize the solution, access to demand generating activities, and to access information and bids that relate to products and services. It offers eProcurement solutions for governments, educational institutions, healthcare organizations, private enterprises, buying groups. Elcom International Inc. was founded in 1992 and is based in Braintree, Massachusetts.

About Magic Software Enterprises

Magic Software Enterprises Ltd. provides proprietary application development, vertical software solutions, business process integration, information technologies (IT) outsourcing software services, and cloud-based services in Israel and internationally. Its Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. The company’s IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services. It also offers proprietary application platforms, such as Magic xpa for developing and deploying business applications; AppBuilder for building, deploying, and maintaining business applications; Magic xpi for application integration; Magic xpi cloud native; FactoryEye for virtualization of production data; Magic Data Management and Analytics Platform for data management; and Magic SmartUX for cross-platform mobile business applications. The company also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Cargo, a packaged software solution for managing air cargo ground handling; HR Pulse, a single-tenant software as a service tool; MBS Solution, a system for managing TV broadcast management; Nativ, a system for management of rehabilitation centers; and Mobisale, a system for sales and distribution field activities for consumer goods manufacturers and wholesalers. In addition, It provides software maintenance, support, training, and consulting services. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. The company was incorporated in 1983 and is headquartered in Or Yehuda, Israel.