Head-To-Head Analysis: Dolby Laboratories (DLB) versus Acacia Research (ACTG)

Dolby Laboratories (NYSE: DLB) and Acacia Research (NASDAQ:ACTG) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Analyst Recommendations

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This is a breakdown of recent ratings for Dolby Laboratories and Acacia Research, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dolby Laboratories 0 3 1 0 2.25
Acacia Research 1 0 1 0 2.00

Dolby Laboratories presently has a consensus price target of $62.00, suggesting a potential downside of 8.20%. Acacia Research has a consensus price target of $6.50, suggesting a potential upside of 84.40%. Given Acacia Research’s higher probable upside, analysts clearly believe Acacia Research is more favorable than Dolby Laboratories.

Risk & Volatility

Dolby Laboratories has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Institutional and Insider Ownership

53.3% of Dolby Laboratories shares are held by institutional investors. Comparatively, 65.8% of Acacia Research shares are held by institutional investors. 43.8% of Dolby Laboratories shares are held by insiders. Comparatively, 2.8% of Acacia Research 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.

Dividends

Dolby Laboratories pays an annual dividend of $0.64 per share and has a dividend yield of 0.9%. Acacia Research does not pay a dividend. Dolby Laboratories pays out 29.1% of its earnings in the form of a dividend. Dolby Laboratories has increased its dividend for 3 consecutive years.

Profitability

This table compares Dolby Laboratories and Acacia Research’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dolby Laboratories 6.06% 12.02% 10.15%
Acacia Research 33.91% 50.06% 46.80%

Earnings & Valuation

This table compares Dolby Laboratories and Acacia Research’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dolby Laboratories $1.08 billion 6.47 $201.80 million $2.20 30.70
Acacia Research $65.40 million 2.73 $22.18 million $2.97 1.19

Dolby Laboratories has higher revenue and earnings than Acacia Research. Acacia Research is trading at a lower price-to-earnings ratio than Dolby Laboratories, indicating that it is currently the more affordable of the two stocks.

About Dolby Laboratories

Dolby Laboratories, Inc. designs and manufactures audio and imaging products for the cinema, television, broadcast and entertainment industries. Its products for cinema include Digital Cinema Servers and Cinema Audio Products, and broadcast and other include Dolby Conference Phone and Other Products. It offers services to support theatrical and television production for cinema exhibition, broadcast and home entertainment, including equipment training and maintenance, mixing room alignment and equalization, as well as audio, color and light image calibration. Its technologies include Advanced Audio Coding and High Efficiency Advanced Audio Coding, Dolby AC-4, Dolby Atmos, Dolby Digital, Dolby Digital Plus, Dolby TrueHD, Dolby Vision, Dolby Voice and High Efficiency Video Coding. It distributes its products in over 80 countries. Its technologies are incorporated in offerings in various end markets, such as the broadcast, Personal Computer, mobile, consumer electronics and other markets.

About Acacia Research

Acacia Research Corporation, through its subsidiaries, invests in, licenses and enforces patented technologies. The Company’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. The Company’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The Company’s operating subsidiaries own or control the rights to multiple patent portfolios, which include the United States patents and certain foreign counterparts, covering technologies used in a range of industries.

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