Head to Head Review: Determine (DTRM) versus Magic Software Enterprises (MGIC)
Determine (NASDAQ: DTRM) and Magic Software Enterprises (NASDAQ:MGIC) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.
Magic Software Enterprises pays an annual dividend of $0.26 per share and has a dividend yield of 3.3%. Determine does not pay a dividend. 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.
This table compares Determine and Magic Software Enterprises’ 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%|
Institutional & Insider Ownership
23.3% of Determine shares are owned by institutional investors. Comparatively, 9.0% of Magic Software Enterprises shares are owned by institutional investors. 10.0% of Determine shares are owned by company insiders. Comparatively, 4.5% of Magic Software Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Determine and Magic Software Enterprises’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Determine||$27.96 million||1.01||-$5.40 million||($0.77)||-2.51|
|Magic Software Enterprises||$235.86 million||1.47||$36.98 million||$0.27||28.89|
Magic Software Enterprises has higher revenue and earnings than Determine. Determine is trading at a lower price-to-earnings ratio than Magic Software Enterprises, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Determine has a beta of 1.95, meaning that its stock price is 95% more volatile than the S&P 500. Comparatively, Magic Software Enterprises has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Determine and Magic Software Enterprises, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Magic Software Enterprises||0||1||4||0||2.80|
Determine presently has a consensus target price of $4.00, suggesting a potential upside of 107.25%. Magic Software Enterprises has a consensus target price of $10.00, suggesting a potential upside of 28.21%. Given Determine’s stronger consensus rating and higher probable upside, research analysts clearly believe Determine is more favorable than Magic Software Enterprises.
Magic Software Enterprises beats Determine on 9 of the 15 factors compared between the two stocks.
Determine Company Profile
Determine, Inc., (Determine), formerly Selectica, Inc., is a provider of enterprise contract management, supply management and configuration solutions. The Company is engaged in providing software as a service (SaaS) Source to Pay and Enterprise Contract Lifecyclem Management (ECLM) solutions. Its Source to Pay software suite includes strategic sourcing, supplier management, contract management and procure-to-pay applications. The Determine Cloud Platform gives procurement, finance and legal professionals the ability to deliver insights through analysis of their supplier relationships and contractual requirements. The Determine platform is an open technology infrastructure based on smart process application models. In addition to its source to pay and enterprise contract lifecycle management solutions suite, Determine also provides a configuration engine solution. The Company’s Configuration engine consolidates the management and dissemination of complex product information.
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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