Digital Media Solutions (NYSE:DMS – Get Rating) and Akamai Technologies (NASDAQ:AKAM – Get Rating) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.
Analyst Recommendations
This is a summary of current ratings for Digital Media Solutions and Akamai Technologies, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Digital Media Solutions | 0 | 0 | 2 | 0 | 3.00 |
| Akamai Technologies | 1 | 4 | 9 | 0 | 2.57 |
Digital Media Solutions presently has a consensus target price of $13.25, suggesting a potential upside of 335.86%. Akamai Technologies has a consensus target price of $132.55, suggesting a potential upside of 22.23%. Given Digital Media Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe Digital Media Solutions is more favorable than Akamai Technologies.
Profitability
This table compares Digital Media Solutions and Akamai Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Digital Media Solutions | 1.00% | -11.84% | 3.39% |
| Akamai Technologies | 18.83% | 17.37% | 9.72% |
Institutional and Insider Ownership
2.7% of Digital Media Solutions shares are owned by institutional investors. Comparatively, 89.6% of Akamai Technologies shares are owned by institutional investors. 87.7% of Digital Media Solutions shares are owned by company insiders. Comparatively, 2.4% of Akamai Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Digital Media Solutions has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Akamai Technologies has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.
Valuation & Earnings
This table compares Digital Media Solutions and Akamai Technologies’ gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Digital Media Solutions | $333.38 million | 0.56 | -$8.70 million | $0.10 | 30.40 |
| Akamai Technologies | $3.46 billion | 5.09 | $651.64 million | $3.93 | 27.59 |
Akamai Technologies has higher revenue and earnings than Digital Media Solutions. Akamai Technologies is trading at a lower price-to-earnings ratio than Digital Media Solutions, indicating that it is currently the more affordable of the two stocks.
Summary
Akamai Technologies beats Digital Media Solutions on 9 of the 14 factors compared between the two stocks.
Digital Media Solutions Company Profile (Get Rating)
Digital Media Solutions, Inc. is a marketing technology company, which engages in the provision of performance-driven brand and marketplace solutions to connect, consumers and advertisers. It operates through the following segments: Brand Direct, Marketplace, and Other. The Brand Direct segment comprises fees from the charge collected to customer when the company advertise directly for them under their brand name. The Marketplace segment include fees charge to customer from advertising their business under company’s brand name. The Other segment provides management of digital media services on behalf of customers as well as SaaS. The company was founded by Joseph L. Marinucci, Fernando Borghese, Luis A. Ruelas, Matt Goodman, and David Shteif in 2012 and is headquartered in Clearwater, FL.
Akamai Technologies Company Profile (Get Rating)
Akamai Technologies, Inc. engages in the provision of cloud services for delivering, optimizing, and securing content and business applications over the Internet. Its products include security, web performance, media delivery, and network operator. The company was founded by Frank T. Leighton, Jonathan Seelig, Randall S. Kaplan, and Daniel M. Lewin on August 20, 1998 and is headquartered in Cambridge, MA.
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