Marchex (NASDAQ:MCHX) & Capita (OTCMKTS:CTAGY) Critical Analysis

Capita (OTCMKTS:CTAGY) and Marchex (NASDAQ:MCHX) are both small-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Volatility & Risk

Capita has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Marchex has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Capita and Marchex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capita	0	0	0	0	N/A
Marchex	0	0	0	0	N/A

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capita	$3.50 billion	0.09	-$221.54 million	N/A	N/A
Marchex	$49.91 million	1.24	-$9.91 million	($0.15)	-9.47

Marchex has lower revenue, but higher earnings than Capita.

Profitability

This table compares Capita and Marchex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capita	N/A	N/A	N/A
Marchex	-13.97%	-15.17%	-11.52%

Institutional & Insider Ownership

73.5% of Marchex shares are held by institutional investors. 20.3% of Marchex shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Marchex beats Capita on 5 of the 9 factors compared between the two stocks.

About Capita

Capita plc provides consulting, digital, and software products and services to clients in the private and public sectors in the United Kingdom and internationally. It operates in two divisions: Public Service and Capita Experience divisions. The company offers solutions for finance and accounting, procurement, property and infrastructure, travel and event, and workplace administration. It also provides customer experience transformation, contact management, collection and debt management, complaint handling, customer experience system and software, acquisition and retention, and data and analytics. In addition, the company offers licensing and support, support, digital policing, and engineering practice; learning and development services; education service and local education authority software; solutions for central and local government services; and business process services. Further, it provides pension administration and software, pensions consulting, and data solutions; finance software, automation, and management information systems solutions; cloud, cyber security, digital connectivity, IT services, robotic process automation, and workplace IT solutions; and actuarial, defence, financial, healthcare, housing, legal, public safety, retail, retail banking, utility, and welfare and employability services. The company was formerly known as The Capita Group plc and changed its name to Capita plc in January 2012. Capita plc was founded in 1984 and is based in London, the United Kingdom.

About Marchex

Marchex, Inc., a conversation intelligence company, provides conversational analytics and related solutions in the United States, Canada, and internationally. Its products include Marketing Edge that identifies which campaigns and channels are driving inbound conversations, evaluates what happens during those conversations, and closes the sales loop by connecting converted sales to marketing driven leads; Sonar Business Text Messaging, an artificial intelligence (AI) empowered intelligent workflow enabled mobile messaging solution that enables operations, sales, and marketing teams to communicate personally with field staff, prospects, and customers; Marchex Platform Services, a robust API-based conversation intelligence product that allows executives, sales, customer engagement, and marketing teams to apply Marchex AI to most any calls, regardless of communication platform, in order to identify actionable insights from conversations with their customers; Spotlight, an AI conversation analytics product for multi-location businesses; and Engage, a solution that provides locations with applications to enhance their overall performance. The company was incorporated in 2003 and is headquartered in Seattle, Washington.