Digital Media Solutions (NYSE:DMS) and Conduent (NASDAQ:CNDT) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.
Institutional and Insider Ownership
5.0% of Digital Media Solutions shares are held by institutional investors. Comparatively, 72.9% of Conduent shares are held by institutional investors. 0.3% of Conduent shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Digital Media Solutions and Conduent's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Digital Media Solutions | N/A | N/A | $-1,320,000.00 | N/A | N/A |
Conduent | $4.47 billion | 0.33 | $-1,934,000,000.00 | $0.62 | 11.06 |
Digital Media Solutions has higher earnings, but lower revenue than Conduent.
Analyst Recommendations
This is a breakdown of current ratings for Digital Media Solutions and Conduent, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Digital Media Solutions | 0 | 0 | 4 | 0 | 3.00 |
Conduent | 0 | 1 | 1 | 0 | 2.50 |
Digital Media Solutions currently has a consensus target price of $14.80, indicating a potential upside of 23.54%. Conduent has a consensus target price of $6.00, indicating a potential downside of 12.54%. Given Digital Media Solutions' stronger consensus rating and higher probable upside, equities research analysts clearly believe Digital Media Solutions is more favorable than Conduent.
Profitability
This table compares Digital Media Solutions and Conduent's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Digital Media Solutions | N/A | -102.15% | 7.09% |
Conduent | -16.35% | 11.40% | 3.16% |
Summary
Digital Media Solutions beats Conduent on 6 of the 10 factors compared between the two stocks.