Insignia Systems (NASDAQ:ISIG) and National CineMedia (NASDAQ:NCMI) are both small-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Dividends

National CineMedia pays an annual dividend of $0.68 per share and has a dividend yield of 9.9%. Insignia Systems does not pay a dividend. National CineMedia pays out 170.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

17.0% of Insignia Systems shares are held by institutional investors. Comparatively, 87.3% of National CineMedia shares are held by institutional investors. 2.2% of Insignia Systems shares are held by company insiders. Comparatively, 2.3% of National CineMedia shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Insignia Systems and National CineMedia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Insignia Systems 4.90% 10.68% 7.28%
National CineMedia 1.82% -50.31% 2.99%

Earnings & Valuation

This table compares Insignia Systems and National CineMedia’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Insignia Systems $26.43 million 0.74 -$630,000.00 N/A N/A
National CineMedia $426.10 million 1.28 $2.50 million $0.40 17.23

National CineMedia has higher revenue and earnings than Insignia Systems.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Insignia Systems and National CineMedia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Insignia Systems 0 0 0 0 N/A
National CineMedia 0 2 2 0 2.50

National CineMedia has a consensus target price of $10.17, indicating a potential upside of 47.56%. Given National CineMedia’s higher probable upside, analysts clearly believe National CineMedia is more favorable than Insignia Systems.

Volatility and Risk

Insignia Systems has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, National CineMedia has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Summary

National CineMedia beats Insignia Systems on 9 of the 14 factors compared between the two stocks.

About Insignia Systems

Insignia Systems, Inc. develops and markets in-store advertising products, programs, and services to retailers and consumer packaged goods manufacturers in the United States and internationally. The company's primary product is the Point-Of-Purchase Services in-store marketing program that allows manufacturers to deliver product information to consumers at the point-of-purchase, and to leverage the local retailer brand and store-specific prices. Its products also include POPSign program, a point-of-purchase advertising and promotion program that delivers information from manufacturers, such as product uses and features, nutritional information, advertising taglines, product images, or usage photos; and freshADS, an advertising vehicle. In addition, the company offers brand-equity signage programs; provides adhesive and non-adhesive supplies in various colors, sizes, and weights; and sells laser printable cardstock and label supplies. Insignia Systems, Inc. was founded in 1990 and is based in Minneapolis, Minnesota.

About National CineMedia

National CineMedia, Inc., through its subsidiary, National CineMedia, LLC, operates an in-theatre digital media network in North America. The company produces and distributes various versions of Noovie, a cinema advertising and entertainment pre-show on movie screens; sells advertising on its lobby entertainment network; and other forms of advertising and promotions in theatre lobbies. It is also involved in the sale of online and mobile advertising across its Noovie digital products, as well as through its Cinema Accelerator digital product and mobile app. The company offers its services to third-party theatre circuits under long-term network affiliate agreements. National CineMedia, Inc. was founded in 2005 and is headquartered in Centennial, Colorado.

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