Adobe Systems (NASDAQ: ADBE) and YuMe (NYSE:YUME) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Dividends

YuMe pays an annual dividend of $0.12 per share and has a dividend yield of 3.3%. Adobe Systems does not pay a dividend. YuMe pays out 120.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings and price targets for Adobe Systems and YuMe, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adobe Systems 0 7 22 0 2.76
YuMe 0 0 0 0 N/A

Adobe Systems presently has a consensus target price of $182.83, indicating a potential upside of 3.00%. Given Adobe Systems’ higher probable upside, analysts clearly believe Adobe Systems is more favorable than YuMe.

Earnings and Valuation

This table compares Adobe Systems and YuMe’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Adobe Systems $7.30 billion 11.98 $1.17 billion $3.39 52.36
YuMe $160.41 million 0.78 -$7.72 million $0.10 35.90

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

Profitability

This table compares Adobe Systems and YuMe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adobe Systems 23.20% 22.57% 13.19%
YuMe 5.25% 10.01% 6.37%

Risk and Volatility

Adobe Systems has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, YuMe has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Institutional & Insider Ownership

87.5% of Adobe Systems shares are held by institutional investors. Comparatively, 48.0% of YuMe shares are held by institutional investors. 0.4% of Adobe Systems shares are held by insiders. Comparatively, 29.3% of YuMe shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Adobe Systems beats YuMe on 13 of the 15 factors compared between the two stocks.

About Adobe Systems

Adobe Systems Incorporated is a software company. The Company offers products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences. It operates through three segments: Digital Media, Digital Marketing, and Print and Publishing. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content. Its Digital Marketing segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured and optimized. Its Print and Publishing segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to its legacy type and original equipment manufacturer (OEM) printing businesses.

About YuMe

YuMe, Inc. (YuMe) is an independent provider of multi-screen video advertising technology, connecting brand advertisers, digital media property owners and consumers of video content across a range of Internet-connected devices. The Company operating segments include Domestic and International. The Company offers advertising customers end-to-end marketing solutions by combining data-driven technologies with deep insight into audience behavior. The Company also offers demand-side platform (DSP), called YuMe for Advertisers, to find relevant audiences and deliver targeted advertising, and a supply-side platform (SSP), called YuMe for Publishers (YFP 5.0), which helps aggregate audiences, define audience characteristics and offer monetization opportunities for digital media property owners. Its technologies serve the specific needs of brand advertisers and enable them to find and target brand-receptive audiences across a range of Internet connected devices and digital media properties.

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