ACI Worldwide (NASDAQ:ACIW – Get Free Report) and Digimarc (NASDAQ:DMRC – Get Free Report) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.
Profitability
This table compares ACI Worldwide and Digimarc’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ACI Worldwide | 12.40% | 17.62% | 8.47% |
| Digimarc | -99.80% | -34.31% | -24.52% |
Volatility & Risk
ACI Worldwide has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Digimarc has a beta of 2.44, meaning that its share price is 144% more volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ACI Worldwide | $1.76 billion | 2.93 | $226.66 million | $2.18 | 23.43 |
| Digimarc | $33.91 million | 4.13 | -$32.31 million | ($1.43) | -4.37 |
ACI Worldwide has higher revenue and earnings than Digimarc. Digimarc is trading at a lower price-to-earnings ratio than ACI Worldwide, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
94.7% of ACI Worldwide shares are owned by institutional investors. Comparatively, 66.8% of Digimarc shares are owned by institutional investors. 1.2% of ACI Worldwide shares are owned by company insiders. Comparatively, 26.0% of Digimarc shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of current ratings and recommmendations for ACI Worldwide and Digimarc, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ACI Worldwide | 0 | 0 | 2 | 1 | 3.33 |
| Digimarc | 1 | 0 | 1 | 0 | 2.00 |
ACI Worldwide presently has a consensus price target of $66.00, indicating a potential upside of 29.23%. Digimarc has a consensus price target of $15.00, indicating a potential upside of 140.00%. Given Digimarc’s higher probable upside, analysts clearly believe Digimarc is more favorable than ACI Worldwide.
Summary
ACI Worldwide beats Digimarc on 11 of the 15 factors compared between the two stocks.
About ACI Worldwide
ACI Worldwide, Inc., a software company, develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments in the United States and internationally. The company operates in three segments: Banks, Merchants, and Billers. The company offers ACI Acquiring, a solution to process credit, debit, and prepaid card transactions, deliver digital innovation, and fraud prevention; ACI Issuing, a digital payment issuing solution for new payment offering; and ACI Enterprise Payments Platform that provides payment processing and orchestration capabilities for digital payments. It also provides ACI Low Value Real-Time Payments, a platform for processing real-time payments; and ACI High Value Real-Time Payments, a payments engine that offers multi-bank, multi-currency, 24×7 payment processing, and SWIFT messaging. In addition, the company offers ACI Payments Orchestration Platform for optimizing payments; omni-channel payment platform; ACI Fraud Management, a real-time approach to fraud management; and ACI Speedpay, an integrated suite of digital billing, payment, disbursement, and communication services. The company offers electronic bill presentment and payment services to consumer finance, insurance, healthcare, higher education, utility, government, telecommunications, and mortgage sectors; implementation services, include product installations and configurations, and custom software modifications; and business and technical consultancy, on-site support, product education, and testing services, as well as distributes or acts as a sales agent for software developed by third parties. It markets its products under the ACI Worldwide brand. The company was formerly known as Transaction Systems Architects, Inc. and changed its name to ACI Worldwide, Inc. in July 2007. The company was founded in 1975 and is based in Elkhorn, Nebraska.
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.
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