YuMe (NYSE: YUME) and Twilio (NYSE:TWLO) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Earnings and Valuation

This table compares YuMe and Twilio’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
YuMe $159.78 million 1.02 $10.08 million $0.10 47.00
Twilio $336.73 million 8.36 -$34.74 million ($0.52) -58.88

YuMe has higher revenue, but lower earnings than Twilio. Twilio is trading at a lower price-to-earnings ratio than YuMe, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares YuMe and Twilio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YuMe 2.46% 4.36% 2.88%
Twilio -13.42% -15.40% -12.25%

Analyst Ratings

This is a breakdown of current recommendations for YuMe and Twilio, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YuMe 1 1 0 0 1.50
Twilio 1 1 15 0 2.82

YuMe currently has a consensus target price of $3.00, indicating a potential downside of 36.17%. Twilio has a consensus target price of $37.93, indicating a potential upside of 23.88%. Given Twilio’s stronger consensus rating and higher probable upside, analysts clearly believe Twilio is more favorable than YuMe.

Insider and Institutional Ownership

38.5% of YuMe shares are held by institutional investors. Comparatively, 84.3% of Twilio shares are held by institutional investors. 29.3% of YuMe shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

YuMe has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Twilio has a beta of 3.26, indicating that its stock price is 226% more volatile than the S&P 500.

Dividends

YuMe pays an annual dividend of $0.03 per share and has a dividend yield of 0.6%. Twilio does not pay a dividend. YuMe pays out 30.0% of its earnings in the form of a dividend.

Summary

Twilio beats YuMe on 8 of the 15 factors compared between the two stocks.

About YuMe

YuMe, Inc. (YuMe) is an independent provider of multi-screen video advertising technology, connecting brand advertisers, digital media property owners and consumers of video content across a range of Internet-connected devices. The Company operating segments include Domestic and International. The Company offers advertising customers end-to-end marketing solutions by combining data-driven technologies with deep insight into audience behavior. The Company also offers demand-side platform (DSP), called YuMe for Advertisers, to find relevant audiences and deliver targeted advertising, and a supply-side platform (SSP), called YuMe for Publishers (YFP 5.0), which helps aggregate audiences, define audience characteristics and offer monetization opportunities for digital media property owners. Its technologies serve the specific needs of brand advertisers and enable them to find and target brand-receptive audiences across a range of Internet connected devices and digital media properties.

About Twilio

Twilio Inc. offers Cloud Communications Platform, which enables developers to build, scale and operate real-time communications within software applications. The Company’s platform consists of Programmable Communications Cloud, Super Network and Business Model for Innovators. Its Programmable Communications Cloud software enables developers to embed voice, messaging, video and authentication capabilities into their applications through its Application Programming Interfaces (APIs). Its Programmable Communications Cloud offers building blocks that enable its customers to build what they need. Its Programmable Communications Cloud includes Programmable Voice, Programmable Messaging, Programmable Video and Use Case APIs. The Super Network is its software layer that allows its customers’ software to communicate with connected devices globally. It interconnects with communications networks around the world.

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