Critical Analysis: Actua (ACTA) & LogMeIn (NASDAQ:LOGM)

LogMeIn (NASDAQ: LOGM) and Actua (NASDAQ:ACTA) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for LogMeIn and Actua, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LogMeIn 0 1 8 0 2.89
Actua 0 1 0 0 2.00

LogMeIn presently has a consensus target price of $141.71, suggesting a potential upside of 17.12%. Actua has a consensus target price of $17.00, suggesting a potential upside of 7.26%. Given LogMeIn’s stronger consensus rating and higher probable upside, equities analysts clearly believe LogMeIn is more favorable than Actua.

Volatility & Risk

LogMeIn has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Actua has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500.

Dividends

LogMeIn pays an annual dividend of $1.00 per share and has a dividend yield of 0.8%. Actua does not pay a dividend. LogMeIn pays out 909.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares LogMeIn and Actua’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LogMeIn $336.07 million 18.95 $2.63 million $0.11 1,100.10
Actua $109.30 million 4.74 $70.08 million $2.21 7.17

Actua has lower revenue, but higher earnings than LogMeIn. Actua is trading at a lower price-to-earnings ratio than LogMeIn, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

99.3% of LogMeIn shares are held by institutional investors. Comparatively, 72.5% of Actua shares are held by institutional investors. 2.5% of LogMeIn shares are held by insiders. Comparatively, 10.2% of Actua shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares LogMeIn and Actua’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LogMeIn 1.01% 5.50% 4.23%
Actua 67.78% -5.80% -4.62%

Summary

LogMeIn beats Actua on 10 of the 16 factors compared between the two stocks.

About LogMeIn

LogMeIn, Inc. provides a portfolio of cloud-based service offerings, which helps people and businesses to connect to their workplace, colleagues and customers. The Company’s core cloud-based services are categorized into four business lines: Communications and Collaboration; Engagement and Support; Identity and Access, and Additional Service Offerings. The Company’s communication and collaboration services include GoToMeeting; GoToTraining; GoToWebinar; join.me, join.me pro and join.me enterprise; OpenVoice, and Grasshopper. The Company’s customer engagement and support services include BoldChat; GoToAssist, GoToAssist Corporate and GoToAssist Seeit; LogMeIn Rescue, Rescue Lens and LogMeIn Rescue+Mobile, and Xively. Its identity and access management services include LogMeIn Central, GoToMyPC, LogMeIn Pro and LastPass. Its additional service offerings include LogMeIn Backup, LogMeIn Hamachi and RemotelyAnywhere.

About Actua

Actua Corporation, formerly ICG Group, Inc., is a multi-vertical cloud technology company. The Company operates through two segments, which include the vertical cloud segment and the vertical cloud (venture) segment. The Company’s vertical cloud-based businesses include Bolt Solutions Inc. (Bolt), GovDelivery Holdings, Inc. (GovDelivery) and VelocityEHS Holdings, Inc. (VelocityEHS), which operate in the commercial and personal property and casualty insurance, wealth management, government communications and environmental, health and safety (EH&S) markets, respectively. The vertical cloud (venture) businesses include InstaMed Holdings, Inc. (InstaMed) and Parchment Inc. (Parchment), which operate a cloud-based healthcare payments network and an education credentials technology, respectively.

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