Cubic Corporation (NYSE: CUB) and DigitalGlobe (NYSE:DGI) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Volatility & Risk

Cubic Corporation has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, DigitalGlobe has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Profitability

This table compares Cubic Corporation and DigitalGlobe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cubic Corporation -2.20% -4.74% -2.22%
DigitalGlobe 0.64% 2.40% 0.97%

Institutional & Insider Ownership

88.8% of Cubic Corporation shares are owned by institutional investors. Comparatively, 96.3% of DigitalGlobe shares are owned by institutional investors. 7.9% of Cubic Corporation shares are owned by company insiders. Comparatively, 1.9% of DigitalGlobe shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Cubic Corporation pays an annual dividend of $0.27 per share and has a dividend yield of 0.5%. DigitalGlobe does not pay a dividend. Cubic Corporation pays out -22.7% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Cubic Corporation and DigitalGlobe’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cubic Corporation $1.45 billion 0.95 $53.94 million ($1.19) -42.86
DigitalGlobe $809.90 million 2.71 $402.60 million $0.02 1,763.38

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Cubic Corporation and DigitalGlobe, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cubic Corporation 0 0 5 0 3.00
DigitalGlobe 0 4 1 0 2.20

Cubic Corporation presently has a consensus price target of $56.40, indicating a potential upside of 10.59%. DigitalGlobe has a consensus price target of $33.90, indicating a potential downside of 3.83%. Given Cubic Corporation’s stronger consensus rating and higher possible upside, equities analysts clearly believe Cubic Corporation is more favorable than DigitalGlobe.

Summary

DigitalGlobe beats Cubic Corporation on 8 of the 15 factors compared between the two stocks.

Cubic Corporation Company Profile

Cubic Corporation (Cubic) designs, integrates and operates systems, products and services that provide situational awareness for its customers in the transportation and defense industries. The Company operates in three business segments across the global transportation and defense markets, which include Cubic Transportation Systems (CTS), Cubic Global Defense (CGD) and Cubic Global Defense Services (CGD Services). The Company’s CTS segment is a systems integrator of payment and information technology and services for travel solutions. The Company’s CGD Systems is focused on two primary lines of business: training systems and secure communications (SC) products. The Company’s CGD Services segment is a provider of training, operations, intelligence, maintenance, technical and other support services to the United States government and its agencies and allied nations. It also provides cross-domain hardware solutions to address multi-level security challenges across common networks.

DigitalGlobe Company Profile

DigitalGlobe, Inc. is a provider of Earth imagery, data and analysis. The Company’s imagery solutions and other services support a range of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration and infrastructure management. The Company’s imagery solutions and other services are sourced from its own satellite constellation and third-party providers. The Company sells its products and services through a combination of direct and indirect channels, consisting of a global network of resellers, strategic partners and direct enterprise sales to its United States Government and Diversified Commercial customer groups. The Company offers products consisting of imagery from its constellation of satellites, and provides geospatial products and services. The Company processes its imagery to varying levels according to its customers’ specifications and delivers its products using the distribution method.

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