Head to Head Survey: Acacia Research (ACTG) versus Research Frontiers (REFR)

Acacia Research (NASDAQ: ACTG) and Research Frontiers (NASDAQ:REFR) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

61.7% of Acacia Research shares are owned by institutional investors. Comparatively, 14.7% of Research Frontiers shares are owned by institutional investors. 11.0% of Acacia Research shares are owned by insiders. Comparatively, 9.5% of Research Frontiers shares are owned 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.

Valuation and Earnings

This table compares Acacia Research and Research Frontiers’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Research $65.40 million 3.10 $22.18 million $2.97 1.35
Research Frontiers $1.51 million 14.15 -$2.41 million ($0.10) -8.40

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

Volatility and Risk

Acacia Research has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Research Frontiers has a beta of -0.05, indicating that its stock price is 105% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Acacia Research and Research Frontiers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Research 1 0 1 0 2.00
Research Frontiers 0 0 1 0 3.00

Acacia Research presently has a consensus target price of $6.50, suggesting a potential upside of 62.50%. Research Frontiers has a consensus target price of $3.00, suggesting a potential upside of 257.14%. Given Research Frontiers’ stronger consensus rating and higher possible upside, analysts plainly believe Research Frontiers is more favorable than Acacia Research.

Profitability

This table compares Acacia Research and Research Frontiers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Research 1.66% 42.95% 39.10%
Research Frontiers -145.67% -73.63% -64.80%

Summary

Acacia Research beats Research Frontiers on 10 of the 13 factors compared between the two stocks.

Acacia Research Company Profile

Acacia Research Corporation, together with its subsidiaries, invests in, licenses, and enforces patented technologies. It assists patent owners with the prosecution and development of their patent portfolios; protection of their patented inventions from unauthorized use; generation of licensing revenue from users of their patented technologies; and enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The company owns or controls the rights to various patent portfolios, which include U.S. patents and foreign counterparts covering technologies used in a range of industries. It has executed approximately 1,550 license agreements and 193 patent portfolio licensing and enforcement programs. Acacia Research Corporation was founded in 1992 and is headquartered in Newport Beach, California.

Research Frontiers Company Profile

Research Frontiers Incorporated develops and markets technology and devices to control the flow of light in the United States. The company develops and licenses suspended particle device (SPD-Smart) light-control technology to companies that manufacture and market the SPD-Smart chemical emulsion, light-control film made from the chemical emulsion, the light-control panels made by laminating the film, lamination services, and electronics to power end-products incorporating the film, as well as the end-products, such as windows, skylights, and sunroofs. Its SPD-Smart light-control technology is used in various product applications, including windows, sunshades, skylights, and interior partitions for homes and buildings; automotive windows, sunroofs, sun-visors, sunshades, rear-view mirrors, instrument panels, and navigation systems; aircraft windows; museum display panels and eyewear products; and flat panel displays for electronic products. The company serves aerospace, architectural, automotive, and marine industries. Research Frontiers Incorporated was founded in 1965 and is headquartered in Woodbury, New York.

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