Head-To-Head Analysis: Great Elm Capital Group (GEC) versus Digimarc Corporation (DMRC)

Great Elm Capital Group (NASDAQ: GEC) and Digimarc Corporation (NASDAQ:DMRC) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Earnings and Valuation

This table compares Great Elm Capital Group and Digimarc Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Great Elm Capital Group $4.93 million 17.88 -$7.25 million $3.21 1.18
Digimarc Corporation $22.43 million 17.41 -$22.78 million ($2.41) -15.04

Great Elm Capital Group has higher revenue, but lower earnings than Digimarc Corporation. Digimarc Corporation is trading at a lower price-to-earnings ratio than Great Elm Capital Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

39.6% of Great Elm Capital Group shares are held by institutional investors. Comparatively, 52.8% of Digimarc Corporation shares are held by institutional investors. 6.6% of Great Elm Capital Group shares are held by company insiders. Comparatively, 7.5% of Digimarc Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Great Elm Capital Group and Digimarc Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Great Elm Capital Group N/A -28.99% -21.24%
Digimarc Corporation -107.49% -32.18% -30.22%

Analyst Recommendations

This is a breakdown of recent ratings for Great Elm Capital Group and Digimarc Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Great Elm Capital Group 0 0 0 0 N/A
Digimarc Corporation 0 1 4 0 2.80

Digimarc Corporation has a consensus target price of $45.75, indicating a potential upside of 26.21%. Given Digimarc Corporation’s higher possible upside, analysts plainly believe Digimarc Corporation is more favorable than Great Elm Capital Group.

Summary

Great Elm Capital Group beats Digimarc Corporation on 6 of the 11 factors compared between the two stocks.

About Great Elm Capital Group

Great Elm Capital Group, Inc., formerly Unwired Planet, Inc., is a holding company. The Company makes investments in businesses and assets in various industries. The Company’s investment for long-term value creation is in the asset management business. The Company continues to explore other opportunities in the investment management business, including other business development companies (BDCs) that trade at a discount to their net asset value. The Company intends to build a diversified investment company consisting of the following three business lines: investment management, financial products and merchant banking. It is embarking on a program of creating bespoke financial products and creating a pipeline of acquisition opportunities. The Company’s subsidiary is Great Elm Capital Corporation (GECC).

About Digimarc Corporation

Digimarc Corporation (Digimarc) enables governments and enterprises to give digital identities to media and objects that computers can sense and recognize. The Company’s Digimarc Discover, Digimarc Barcode and Intuitive Computing Platform are designed to optimize the identification of consumer brand impressions, facilitating mobile-centric shopping. The Company operates through media management solutions segment. The Company’s platform includes means to embed Digimarc Barcodes, invisible and inaudible barcode-like information that is recognizable by smartphones, industrial scanners, and other computer interfaces into various forms of media content, including consumer product packaging. Its Digimarc Barcodes has a range of applications, including facilitating scanning of products at retail checkout, as well as engagement with smartphone-equipped consumers. The Digimarc Barcode allows automatic identification of media without visible computer codes, such as traditional barcodes.

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