Critical Contrast: Digimarc (NASDAQ:DMRC) vs. ADT (NYSE:ADT)

Digimarc (NASDAQ:DMRC) and ADT (NYSE:ADT) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations and price targets for Digimarc and ADT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digimarc	1	0	1	0	2.00
ADT	1	3	2	0	2.17

Digimarc presently has a consensus target price of $15.00, suggesting a potential upside of 31.46%. ADT has a consensus target price of $8.08, suggesting a potential upside of 20.69%. Given Digimarc’s higher probable upside, equities analysts plainly believe Digimarc is more favorable than ADT.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Digimarc	-85.75%	-21.81%	-16.23%
ADT	12.12%	19.23%	4.50%

Insider and Institutional Ownership

66.9% of Digimarc shares are owned by institutional investors. Comparatively, 87.2% of ADT shares are owned by institutional investors. 26.0% of Digimarc shares are owned by insiders. Comparatively, 3.0% of ADT shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Digimarc and ADT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digimarc	$33.91 million	7.48	-$32.31 million	($1.27)	-8.98
ADT	$5.14 billion	1.03	$595.95 million	$0.70	9.56

ADT has higher revenue and earnings than Digimarc. Digimarc is trading at a lower price-to-earnings ratio than ADT, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Digimarc has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500. Comparatively, ADT has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Summary

ADT beats Digimarc on 10 of the 14 factors compared between the two stocks.

About Digimarc

Digimarc Corporation, together with its subsidiaries, provides automatic identification solutions to commercial and government customers in the United States and internationally. The company offers Digimarc Validate protects, a cloud-based record of product authentication information; Digimarc Engage, an interactive communications channel connecting brands and consumers; and Digimarc Recycle. Its solutions are used in various application solutions, such as sorting of consumer-packaged goods in recycling streams. The company offers its solutions through its sales personnel and business partners. Digimarc Corporation was incorporated in 2008 and is based in Beaverton, Oregon.

About ADT

ADT Inc. provides security, interactive, and smart home solutions to residential and small business customers in the United States. It operates through two segments, Consumer and Small Business, and Solar. The company provides burglar and life safety alarms, smart security cameras, smart home automation systems, and video surveillance systems. It primarily offers security designed to detect intrusion, control access, sense movement, smoke, fire, carbon monoxide, flooding, temperature, and other environmental conditions and hazards; and address personal medical emergencies, such as injuries or unanticipated falls. The company also provides automation and smart home solutions that allow customers to use their smart phones, smart phone application, or touchscreen panels in their homes to arm and disarm their security systems; record and view real-time video; and creates customized and automated schedules for connected devices; programs systems to react to defined events; integrates system with third-party connected devices, such as cameras, lights, thermostats, appliances, and garage doors, as well as offers monitoring and maintenance services. In addition, the company offers energy storage solutions, energy efficiency upgrades, and roofing services. It offers its products under the ADT, ADT Pulse, ADT+, and ADT Commercial brand names. The company was formerly known as Prime Security Services Parent, Inc. and changed its name to ADT Inc. in September 2017. ADT Inc. was founded in 1874 and is headquartered in Boca Raton, Florida.