Reviewing Magic Software Enterprises (NASDAQ:MGIC) and Validian (NASDAQ:VLDI)

Magic Software Enterprises (NASDAQ:MGIC) and Validian (OTCMKTS:VLDI) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Magic Software Enterprises and Validian, as provided by MarketBeat.com.

Magic Software Enterprises currently has a consensus target price of $11.00, suggesting a potential upside of 5.33%. Given Magic Software Enterprises’ higher probable upside, analysts plainly believe Magic Software Enterprises is more favorable than Validian.

Valuation & Earnings

This table compares Magic Software Enterprises and Validian’s top-line revenue, earnings per share (EPS) and valuation.

Magic Software Enterprises has higher revenue and earnings than Validian.

Insider and Institutional Ownership

10.7% of Magic Software Enterprises shares are owned by institutional investors. Comparatively, 0.0% of Validian shares are owned by institutional investors. 4.5% of Magic Software Enterprises shares are owned by insiders. Comparatively, 28.3% of Validian shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Magic Software Enterprises has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Validian has a beta of -2.86, indicating that its stock price is 386% less volatile than the S&P 500.

Profitability

This table compares Magic Software Enterprises and Validian’s net margins, return on equity and return on assets.

Summary

Magic Software Enterprises beats Validian on 9 of the 10 factors compared between the two stocks.

About Magic Software Enterprises

Magic Software Enterprises Ltd. provides proprietary application development, business process integration, vertical software solutions, and IT outsourcing software services in Israel and internationally. The company’s Software Services 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, a proprietary application platform for building, deploying, and maintaining high-end and mainframe-grade business applications; Magic xpi integration platform, a graphical wizard-based code-free solution; and Magic xpc, a hybrid integration platform as a service. It also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Solution, a packaged software solution for managing air cargo ground handling; HR Pulse, a customized single-tenant software as a service tool; and MBS Solution, a proprietary system for managing TV broadcast channels. In addition, the company provides software maintenance, support, training, and consulting services. It serves oil and gas, telecommunications, financial, healthcare, and 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.

About Validian

Validian Corporation, a development stage company, provides software products to assist public and private enterprises in Canada and internationally. The company primarily offers ValidianProtect, a software only cyber security technology comprising an application and data protection platform and a data protection module, which protect the life cycle of data by providing secure access, retrieval, transfer, receipt, storage, and usage of digital information on mobile, cloud, Web, local and network applications, devices, servers, databases, and memory at rest, as well as in transit and in usage using wired, and wireless and mobile networks. Its ValidianProtect also provides secure mobile messaging and communications, cloud computing, cloud storage, distributed computing and Web application and Web portal access and usage, software defined networking, and the Internet of Things and SCADA for computers, servers, databases, intelligent sensors, and tablets and smartphones. In addition, the company offers solutions customized to the client’s business process to ensure authenticity, integrity, and custody of digital assets. It offers its products through direct sales, as well as through channel partners, such as independent software vendors, application service providers, value-added resellers, independent marketing representatives, system integrators, and original equipment manufacturers. The company was formerly known as Sochrys.com Inc. and changed its name to Validian Corporation in January 2003. Validian Corporation was incorporated in 1989 and is based in Ottawa, Canada.

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