XO Group (NYSE: XOXO) and MDC Partners (NASDAQ:MDCA) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Earnings and Valuation

This table compares XO Group and MDC Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XO Group $155.73 million 3.29 $14.12 million $0.27 75.97
MDC Partners $1.47 billion 0.44 $150.77 million ($0.56) -19.64

MDC Partners has higher revenue and earnings than XO Group. MDC Partners is trading at a lower price-to-earnings ratio than XO Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

XO Group has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, MDC Partners has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500.

Profitability

This table compares XO Group and MDC Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XO Group 4.55% 4.71% 3.89%
MDC Partners -1.70% -5.72% 1.77%

Institutional and Insider Ownership

83.6% of XO Group shares are held by institutional investors. Comparatively, 83.7% of MDC Partners shares are held by institutional investors. 6.8% of XO Group shares are held by insiders. Comparatively, 3.4% of MDC Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for XO Group and MDC Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XO Group 0 2 3 0 2.60
MDC Partners 0 4 3 0 2.43

XO Group presently has a consensus price target of $20.15, suggesting a potential downside of 1.76%. MDC Partners has a consensus price target of $12.17, suggesting a potential upside of 10.61%. Given MDC Partners’ higher probable upside, analysts plainly believe MDC Partners is more favorable than XO Group.

Summary

XO Group beats MDC Partners on 8 of the 13 factors compared between the two stocks.

XO Group Company Profile

XO Group Inc. is engaged in providing content and marketing solutions, targeted advertising programs, transactions and merchandise. The Company’s multi-platform brands guide couples through transformative life stages from getting married with The Knot, to moving in together with The Nest, to having a baby with The Bump, and helping bring celebrations to life with entertainment vendors from GigMasters.com Incorporated (GigMasters). The Knot is the wedding resource and marketplace that engages, matches and connects couples. The Bump is a pregnancy and parenting brand, providing personalized information, content and tools. The Nest is a brand focused on nesters setting up homes and navigating their lives together. GigMasters is an event marketplace for finding and booking the entertainment and vendors for birthday parties, weddings, anniversaries and corporate events, among others. The Company’s product offerings include Online Media Advertising, Transactions, and Publishing and Other.

MDC Partners Company Profile

MDC Partners Inc. is a provider of global marketing, advertising, activation, communications and strategic consulting solutions. The Company and its subsidiary agencies (Partner Firms) deliver a range of customized services. The Company’s segments include Reportable Segment, All Other and Corporate. The Reportable segment consists of the Company’s integrated advertising, media and public relations service companies. The All Other segment consists of the companies that provide the Company’s specialist marketing offerings, such as direct marketing, sales promotion, market research, strategic communications, database and customer relationship management, data analytics and insights, corporate identity, and design and branding. The Reportable segment includes the operations of various companies, such as Allison & Partners, Anomaly, Crispin Porter + Bogusky, Doner, Forsman & Bodenfors, Hunter PR, kbs, MDC Media Partners and 72andSunny.

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