Critical Comparison: Check Point Software Technologies (CHKP) & YuMe (YUME)

Check Point Software Technologies (NASDAQ: CHKP) and YuMe (NYSE:YUME) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Dividends

YuMe pays an annual dividend of $0.12 per share and has a dividend yield of 3.2%. Check Point Software Technologies does not pay a dividend. YuMe pays out 50.0% of its earnings in the form of a dividend.

Profitability

This table compares Check Point Software Technologies and YuMe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Check Point Software Technologies 43.29% 22.74% 15.24%
YuMe 5.25% 10.01% 6.37%

Earnings and Valuation

This table compares Check Point Software Technologies and YuMe’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Check Point Software Technologies $1.85 billion 9.10 $802.92 million $4.82 21.43
YuMe $160.41 million 0.81 -$7.72 million $0.24 15.42

Check Point Software Technologies has higher revenue and earnings than YuMe. YuMe is trading at a lower price-to-earnings ratio than Check Point Software Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Check Point Software Technologies and YuMe, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Check Point Software Technologies 0 19 5 0 2.21
YuMe 0 0 0 0 N/A

Check Point Software Technologies presently has a consensus price target of $114.15, suggesting a potential upside of 10.52%. Given Check Point Software Technologies’ higher possible upside, analysts clearly believe Check Point Software Technologies is more favorable than YuMe.

Institutional & Insider Ownership

71.6% of Check Point Software Technologies shares are owned by institutional investors. Comparatively, 48.2% of YuMe shares are owned by institutional investors. 29.0% of Check Point Software Technologies shares are owned by insiders. Comparatively, 29.3% of YuMe shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Check Point Software Technologies has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, YuMe has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Summary

Check Point Software Technologies beats YuMe on 13 of the 15 factors compared between the two stocks.

About Check Point Software Technologies

Check Point Software Technologies Ltd. (Check point) develops, markets and supports a range of products and services for information technology (IT) security. The Company’s products and services are sold to enterprises, service providers, small and medium sized businesses and consumers. It offers enterprises a platform to deploy independent, modular and interoperable security applications (Software Blades), such as firewall, virtual private network (VPN), intrusion prevention system (IPS), Application Control, Anti-Bot, antivirus, data loss prevention (DLP), policy management, event analysis or multi-domain management. The Company offers Software Blades grouped into functional packages to address specific security issues. It has product offerings under these packages, which include Next Generation Firewall, Next Generation Threat Prevention, Next Generation Secure Web Gateway and Next Generation Data Protection.

About YuMe

YuMe, Inc. (YuMe) is an independent provider of multi-screen video advertising technology, connecting brand advertisers, digital media property owners and consumers of video content across a range of Internet-connected devices. The Company operating segments include Domestic and International. The Company offers advertising customers end-to-end marketing solutions by combining data-driven technologies with deep insight into audience behavior. The Company also offers demand-side platform (DSP), called YuMe for Advertisers, to find relevant audiences and deliver targeted advertising, and a supply-side platform (SSP), called YuMe for Publishers (YFP 5.0), which helps aggregate audiences, define audience characteristics and offer monetization opportunities for digital media property owners. Its technologies serve the specific needs of brand advertisers and enable them to find and target brand-receptive audiences across a range of Internet connected devices and digital media properties.

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