Head to Head Survey: Take-Two Interactive (TTWO) vs. Magic Software Enterprises (MGIC)

Take-Two Interactive (NASDAQ: TTWO) and Magic Software Enterprises (NASDAQ:MGIC) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Insider & Institutional Ownership

94.5% of Take-Two Interactive shares are owned by institutional investors. Comparatively, 11.0% of Magic Software Enterprises shares are owned by institutional investors. 1.6% of Take-Two Interactive shares are owned by insiders. Comparatively, 4.5% of Magic Software Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Take-Two Interactive and Magic Software Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Take-Two Interactive 9.68% 24.72% 9.42%
Magic Software Enterprises 5.90% 10.41% 6.41%

Dividends

Magic Software Enterprises pays an annual dividend of $0.26 per share and has a dividend yield of 3.0%. Take-Two Interactive does not pay a dividend. Magic Software Enterprises pays out 56.5% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Take-Two Interactive and Magic Software Enterprises’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Take-Two Interactive $1.79 billion 7.15 $173.53 million $1.75 64.01
Magic Software Enterprises $257.99 million 1.49 $15.44 million $0.46 18.80

Take-Two Interactive has higher revenue and earnings than Magic Software Enterprises. Magic Software Enterprises is trading at a lower price-to-earnings ratio than Take-Two Interactive, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Take-Two Interactive and Magic Software Enterprises, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Take-Two Interactive 0 3 18 0 2.86
Magic Software Enterprises 0 0 2 0 3.00

Take-Two Interactive currently has a consensus target price of $128.45, indicating a potential upside of 14.67%. Magic Software Enterprises has a consensus target price of $10.25, indicating a potential upside of 18.50%. Given Magic Software Enterprises’ stronger consensus rating and higher probable upside, analysts clearly believe Magic Software Enterprises is more favorable than Take-Two Interactive.

Risk and Volatility

Take-Two Interactive has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Magic Software Enterprises has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Summary

Take-Two Interactive beats Magic Software Enterprises on 12 of the 16 factors compared between the two stocks.

About Take-Two Interactive

Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games and 2K labels, as well as under Private Division and Social Point labels. It develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club, and Red Dead names through developing sequels; offering downloadable episodes, and content and virtual currency; and releasing titles for smartphones and tablets. The company also develops brands in other genres, including the L.A. Noire, Bully, and Manhunt franchises. In addition, the company publishes various entertainment properties across platforms and a range of genres, including action, adventure, family/casual, racing, role-playing, shooter, sports, and strategy under the Battleborn, BioShock, Borderlands, Carnival Games, Evolve, Mafia, Sid Meier's Civilization, and XCOM franchises. Further, it publishes sports simulation titles, including NBA 2K series, a basketball video game; and the WWE 2K professional wrestling series. Additionally, the company offers free-to-play mobile games, such as Dragon City and Monster Legends on iOS and Android platforms. Its products are designed for console gaming systems, such as Sony's PlayStation 3 and PlayStation 4, and Microsoft's Xbox 360 and Xbox One; and personal computers comprising smartphones and tablets. The company provides its products through physical retail, digital download, online platforms, and cloud streaming services. Take-Two Interactive Software, Inc. was founded in 1993 and is headquartered in New York, New York.

About Magic Software Enterprises

Magic Software Enterprises Ltd. provides proprietary application development, business process integration, and vertical software solutions and related professional services in Israel and internationally. The company's Software Solutions segment develops, markets, sells, and supports a proprietary and none proprietary application platform, software applications, and business and process integration solutions and related services. Its IT professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, and communications services and solutions, as well as supplemental outsourcing services. The company offers Magic xpa, a proprietary application platform for developing and deploying business applications; AppBuilder application platform for building, deploying, and maintaining mainframe-grade business applications; and Magic xpi integration platform, a graphical wizard-based code-free solution. It also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Solution for both hubs and traditional air cargo ground handling operations; HR Pulse, a customized single-tenant software as a service tool that helps organizations to create new human capital management solutions; and MBS Solution, a proprietary system for managing TV broadcast channels. In addition, it provides software maintenance, support, training, and consulting services. It serves oil and gas, telecommunications, financial, healthcare, industrial sectors, as well as public institutions and international agencies. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. Magic Software Enterprises Ltd. was founded in 1983 and is headquartered in Or Yehuda, Israel.

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