Leaf Group (NASDAQ: LFGR) and IAC/InterActiveCorp (NASDAQ:IAC) are both internet services – nec companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Profitability

This table compares Leaf Group and IAC/InterActiveCorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leaf Group -31.38% -52.73% -41.29%
IAC/InterActiveCorp 11.81% 4.26% 1.98%

Volatility and Risk

Leaf Group has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, IAC/InterActiveCorp has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.

Insider & Institutional Ownership

91.4% of IAC/InterActiveCorp shares are held by institutional investors. 11.3% of IAC/InterActiveCorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Leaf Group and IAC/InterActiveCorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Leaf Group N/A N/A N/A ($1.67) -4.37
IAC/InterActiveCorp $3.14 billion 3.15 -$41.28 million $3.96 31.32

Leaf Group has higher revenue, but lower earnings than IAC/InterActiveCorp. Leaf Group is trading at a lower price-to-earnings ratio than IAC/InterActiveCorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Leaf Group and IAC/InterActiveCorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leaf Group 0 1 4 0 2.80
IAC/InterActiveCorp 0 1 17 0 2.94

Leaf Group presently has a consensus target price of $10.30, indicating a potential upside of 41.10%. IAC/InterActiveCorp has a consensus target price of $140.72, indicating a potential upside of 13.48%. Given Leaf Group’s higher possible upside, research analysts plainly believe Leaf Group is more favorable than IAC/InterActiveCorp.

Summary

IAC/InterActiveCorp beats Leaf Group on 10 of the 11 factors compared between the two stocks.

Leaf Group Company Profile

Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.

IAC/InterActiveCorp Company Profile

IAC/InterActiveCorp (IAC) is a media and Internet company. The Company’s brands include HomeAdvisor, Vimeo, Dictionary.com and Match Group’s online dating portfolio, which includes Tinder, PlentyOfFish and OkCupid. Its segments include Match Group, HomeAdvisor, Video, Applications and Publishing. Match Group includes the dating and non-dating businesses of Match Group, Inc. HomeAdvisor is a home services digital marketplace that helps connect consumers with home professionals in North America, as well as in France, the Netherlands and Italy under various brands. Its Video consists of Vimeo, Electus, CollegeHumor, Notional, IAC Films and Daily Burn. Applications consists of Consumer, which include its direct-to-consumer downloadable desktop applications, Apalon, which houses its mobile applications and SlimWare, and Partnerships, which includes its business-to-business partnership operations. Publishing consists of Premium Brands business, and Ask & Other business.

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