Comparing Monotype Imaging (TYPE) & Medidata Solutions (MDSO)

Monotype Imaging (NASDAQ: TYPE) and Medidata Solutions (NASDAQ:MDSO) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Profitability

This table compares Monotype Imaging and Medidata Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monotype Imaging -7.58% -6.13% -3.78%
Medidata Solutions 8.14% 11.59% 5.74%

Risk & Volatility

Monotype Imaging has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Medidata Solutions has a beta of 1.58, indicating that its share price is 58% more volatile than the S&P 500.

Valuation and Earnings

This table compares Monotype Imaging and Medidata Solutions’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monotype Imaging $203.44 million 5.05 $14.88 million $0.27 91.11
Medidata Solutions $545.53 million 7.30 $44.38 million $0.74 91.86

Medidata Solutions has higher revenue and earnings than Monotype Imaging. Monotype Imaging is trading at a lower price-to-earnings ratio than Medidata Solutions, indicating that it is currently the more affordable of the two stocks.

Dividends

Monotype Imaging pays an annual dividend of $0.45 per share and has a dividend yield of 1.8%. Medidata Solutions does not pay a dividend. Monotype Imaging pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Monotype Imaging and Medidata Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monotype Imaging 1 1 0 0 1.50
Medidata Solutions 0 2 11 0 2.85

Monotype Imaging currently has a consensus target price of $24.25, suggesting a potential downside of 1.42%. Medidata Solutions has a consensus target price of $83.00, suggesting a potential upside of 22.09%. Given Medidata Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe Medidata Solutions is more favorable than Monotype Imaging.

Insider and Institutional Ownership

94.3% of Monotype Imaging shares are held by institutional investors. Comparatively, 97.5% of Medidata Solutions shares are held by institutional investors. 2.3% of Monotype Imaging shares are held by insiders. Comparatively, 5.8% of Medidata Solutions shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Medidata Solutions beats Monotype Imaging on 15 of the 16 factors compared between the two stocks.

Monotype Imaging Company Profile

Monotype Imaging Holdings Inc. is engaged in the development, marketing and licensing of technologies and fonts. The Company empowers expression and engagement for creatives, designers, engineers and marketers. It organizes its business operations into two areas: creative professionals and original equipment manufacturer (OEM). For Creative Professional market, it provides content across multiple devices and mediums. Its solutions, which include type, branded mobile content, visual content marketing solutions, custom design services, and tools and technologies that enable the creative process, are licensed through its direct sales channel, e-commerce platforms and partner platforms. It also provides consumer device manufacturers and independent software vendors with the right solutions for delivering consistent, compelling user experiences. It works with a range of customers, including brands, agencies and publishers. As of December 31, 2016, it offered over 17,000 typeface designs.

Medidata Solutions Company Profile

Medidata Solutions Inc. (Medidata) is a provider of cloud-based solutions for life sciences. The Company provides cloud-based solutions for clinical research in life sciences, offering platform technology that focuses on the clinical development. The Company’s plan study addresses three areas to ensure optimal study design, grant development and negotiation, and investigator payments. Study Design Optimization enables customers to gain visibility into the impact of protocol elements on resource and trial endpoints. Grants Manager compares specific industry benchmarks and analytics, using industry’s database of negotiated procedure costs, to support appropriate grants to investigator sites and automated negotiations with multiple investigator sites. Payments enables customers to establish a global investigator payment strategy and process to automate payment calculation, distribution and reporting, including tax and currency exchange calculations.

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