Financial Comparison: Monotype Imaging Holdings (TYPE) vs. Silver Spring Networks (NYSE:SSNI)

Monotype Imaging Holdings (NASDAQ: TYPE) and Silver Spring Networks (NYSE:SSNI) 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 institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Dividends

Monotype Imaging Holdings pays an annual dividend of $0.45 per share and has a dividend yield of 2.0%. Silver Spring Networks does not pay a dividend. Monotype Imaging Holdings pays out 1,500.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares Monotype Imaging Holdings and Silver Spring Networks’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Monotype Imaging Holdings $215.13 million 4.18 $20.38 million $0.03 756.92
Silver Spring Networks $452.27 million 1.91 -$19.70 million ($0.66) -24.42

Monotype Imaging Holdings has higher revenue, but lower earnings than Silver Spring Networks. Silver Spring Networks is trading at a lower price-to-earnings ratio than Monotype Imaging Holdings, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

90.4% of Monotype Imaging Holdings shares are held by institutional investors. Comparatively, 79.5% of Silver Spring Networks shares are held by institutional investors. 2.3% of Monotype Imaging Holdings shares are held by insiders. Comparatively, 29.6% of Silver Spring Networks 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.

Risk and Volatility

Monotype Imaging Holdings has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Silver Spring Networks has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500.

Profitability

This table compares Monotype Imaging Holdings and Silver Spring Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monotype Imaging Holdings 0.61% 3.51% 2.12%
Silver Spring Networks -7.47% N/A -5.55%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Monotype Imaging Holdings and Silver Spring Networks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monotype Imaging Holdings 0 2 0 0 2.00
Silver Spring Networks 0 10 2 0 2.17

Monotype Imaging Holdings currently has a consensus target price of $20.00, indicating a potential downside of 11.89%. Silver Spring Networks has a consensus target price of $14.95, indicating a potential downside of 7.23%. Given Silver Spring Networks’ stronger consensus rating and higher possible upside, analysts clearly believe Silver Spring Networks is more favorable than Monotype Imaging Holdings.

Summary

Monotype Imaging Holdings beats Silver Spring Networks on 8 of the 15 factors compared between the two stocks.

About Monotype Imaging Holdings

Monotype Imaging Holdings Inc. is engaged in the development, marketing and licensing of technologies and fonts. The Company empowers expression and engagement for creatives, designers, engineers and marketers. It organizes its business operations into two areas: creative professionals and original equipment manufacturer (OEM). For Creative Professional market, it provides content across multiple devices and mediums. Its solutions, which include type, branded mobile content, visual content marketing solutions, custom design services, and tools and technologies that enable the creative process, are licensed through its direct sales channel, e-commerce platforms and partner platforms. It also provides consumer device manufacturers and independent software vendors with the right solutions for delivering consistent, compelling user experiences. It works with a range of customers, including brands, agencies and publishers. As of December 31, 2016, it offered over 17,000 typeface designs.

About Silver Spring Networks

Silver Spring Networks, Inc. is engaged in creating, building and deploying large-scale networks and solutions enabling the Internet of things (IoT) for critical infrastructure. The Company provides a networking platform and solutions that enable utilities to transform the power grid infrastructure into the smart grid. Its networking platform enables customers to communicate with devices connected to the power grid. Its networking platform comprises hardware, such as access points and relays; its communications modules; its SilverLinkOS network operating software, and its GridScape management and security software. It offers solutions built upon SilverLink Network and Data platforms, including advanced metering, distribution automation, demand-side management, street lights and its wireless Internet protocol version 6 (IPv6) network service for the IoT, Starfish. Through its managed application services, it manages the SilverLink Control Platform and SilverLink Applications.

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