Tucows (NASDAQ:TCX) and Net Element (NASDAQ:NETE) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Earnings & Valuation

This table compares Tucows and Net Element’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tucows $329.42 million 1.79 $22.32 million N/A N/A
Net Element $60.06 million 0.34 -$9.91 million ($5.04) -1.05

Tucows has higher revenue and earnings than Net Element.

Analyst Ratings

This is a summary of current ratings and recommmendations for Tucows and Net Element, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tucows 0 0 0 0 N/A
Net Element 0 0 0 0 N/A

Profitability

This table compares Tucows and Net Element’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tucows 6.24% 26.59% 4.70%
Net Element -13.22% -88.17% -30.52%

Insider and Institutional Ownership

54.8% of Tucows shares are held by institutional investors. Comparatively, 3.2% of Net Element shares are held by institutional investors. 11.8% of Tucows shares are held by insiders. Comparatively, 27.9% of Net Element 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.

Risk and Volatility

Tucows has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, Net Element has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500.

Summary

Tucows beats Net Element on 9 of the 10 factors compared between the two stocks.

About Tucows

Tucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in Canada, the United States, and Germany. It operates in two segments, Network Access Services and Domain Services. The Network Access Services segment offers mobile and fixed high-speed Internet access services, and Internet hosting and network consulting services. The Domain Services segment provides OpenSRS domain service that offers services related to the registration, renewal, transfer, and management of domain names; OpenSRS value-added services, such as hosted email service that provides email delivery and Webmail access to various mailboxes; Internet security services; publishing tools; SSL certificates; and billing services. This segment also offers Platypus billing software, which provides billing, provisioning, and customer care software solutions to Internet service providers (ISPs); and Internet domain name registration and email services to individuals and small businesses. This segment offers its services under the OpenSRS, eNom, and Hover brands. Tucows Inc. provides its services through an Internet-based distribution network of ISPs, Web hosting companies, and other providers of Internet services to end-users. The company was formerly known as Infonautics, Inc. and changed its name to Tucows Inc. in August 2001. Tucows Inc. was founded in 1992 and is headquartered in Toronto, Canada.

About Net Element

Net Element, Inc. operates as a financial technology and value-added solutions company. It operates in two segments, North American Transaction Solutions, and International Transaction Solutions. The company offers a range of payment acceptance and processing services that enable merchants of various sizes to accept and process approximately 100 payment options, including credit, debit, prepaid, and alternative payments; and value-added services and technologies, such as integrated payment technologies, point-of-sale solutions (POS), security solutions, fraud management, information solutions, and analytical tools. Its services include Unified Payments, a payment acceptance solution; Unified m-POS, an easy-to-use mobile application for small and medium sized businesses (SMB); Aptito, a cloud-based POS platform for the hospitality industry and SMB merchants; Restoactive, a visual POS integration solution for restaurants; Zero Pay, a payment acceptance program for SMB merchants; PayOnline, an integrated e-commerce and mobile payments processing platform, and fraud management system; Pay?Travel, a payment processing solutions to the travel industry; Sales Central, a cloud-based solution to enhance responsiveness of indirect non-bank sales forces and sales efficiency; Netevia, which delivers end-to-end payment processing through easy-to-use APIs; and Digital Provider, an integrated direct-carrier and mobile operator solution for smaller content providers and merchants throughout selected international markets. It operates in North America, Russia, Europe, Asia, and the Commonwealth of Independent States. The company was formerly known as Net Element International, Inc. and changed its name to Net Element, Inc. in December 2013. Net Element, Inc. was founded in 2004 and is based in North Miami Beach, Florida.

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