Magic Software Enterprises (NASDAQ: MGIC) is one of 116 public companies in the “Software” industry, but how does it compare to its competitors? We will compare Magic Software Enterprises to similar companies based on the strength of its earnings, valuation, analyst recommendations, institutional ownership, dividends, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings and target prices for Magic Software Enterprises and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magic Software Enterprises 0 1 4 0 2.80
Magic Software Enterprises Competitors 388 2306 4382 115 2.59

Magic Software Enterprises presently has a consensus target price of $10.00, suggesting a potential upside of 16.28%. As a group, “Software” companies have a potential upside of 9.88%. Given Magic Software Enterprises’ stronger consensus rating and higher possible upside, research analysts plainly believe Magic Software Enterprises is more favorable than its competitors.

Risk & Volatility

Magic Software Enterprises has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Magic Software Enterprises’ competitors have a beta of 0.98, meaning that their average stock price is 2% less volatile than the S&P 500.

Earnings and Valuation

This table compares Magic Software Enterprises and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Magic Software Enterprises $235.86 million $36.98 million 31.85
Magic Software Enterprises Competitors $1.53 billion $451.94 million 41.80

Magic Software Enterprises’ competitors have higher revenue and earnings than Magic Software Enterprises. Magic Software Enterprises is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

9.0% of Magic Software Enterprises shares are held by institutional investors. Comparatively, 61.0% of shares of all “Software” companies are held by institutional investors. 4.5% of Magic Software Enterprises shares are held by insiders. Comparatively, 17.8% of shares of all “Software” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Magic Software Enterprises and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magic Software Enterprises 5.08% 10.49% 6.58%
Magic Software Enterprises Competitors -42.11% -43.60% -9.86%

Dividends

Magic Software Enterprises pays an annual dividend of $0.26 per share and has a dividend yield of 3.0%. Magic Software Enterprises pays out 96.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Software” companies pay a dividend yield of 1.1% and pay out 63.3% of their earnings in the form of a dividend.

Summary

Magic Software Enterprises competitors beat Magic Software Enterprises on 8 of the 15 factors compared.

Magic Software Enterprises Company Profile

Magic Software Enterprises Ltd. is a provider of application development, business process integration platforms, vertical software solutions and related professional services. The Company is a vendor of information technology (IT) outsourcing services. Its software technology is used by customers to develop, deploy and integrate on premise, mobile and cloud-based business. It operates through two segments: software solutions and IT professional services. The software services segment includes software technology and complementary services. The IT professional services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, and communications services and solutions. Its product portfolio includes Magic xpa Application Platform, AppBuilder Application Platform and Magic xpi Integration Platform. Its vertical software packages include Leap, Hermes Solution, HR Pulse and MBS Solution.

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