Reviewing Marchex (MCHX) and The Western Union (WU)

Marchex (NASDAQ:MCHX) and The Western Union (NYSE:WU) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Marchex and The Western Union, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marchex 0 0 1 0 3.00
The Western Union 2 5 0 0 1.71

The Western Union has a consensus target price of $18.00, indicating a potential upside of 0.50%. Given The Western Union’s higher probable upside, analysts plainly believe The Western Union is more favorable than Marchex.

Earnings & Valuation

This table compares Marchex and The Western Union’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marchex $90.29 million 1.30 -$6.08 million ($0.14) -20.14
The Western Union $5.52 billion 1.45 -$557.10 million $1.80 9.95

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

Risk and Volatility

Marchex has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, The Western Union has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Insider & Institutional Ownership

50.5% of Marchex shares are held by institutional investors. 27.4% of Marchex shares are held by company insiders. Comparatively, 1.1% of The Western Union shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

The Western Union pays an annual dividend of $0.76 per share and has a dividend yield of 4.2%. Marchex does not pay a dividend. The Western Union pays out 42.2% of its earnings in the form of a dividend. The Western Union has increased its dividend for 3 consecutive years.

Profitability

This table compares Marchex and The Western Union’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marchex -3.35% -3.44% -2.87%
The Western Union -8.55% -191.92% 9.19%

About Marchex

Marchex, Inc. operates as a call analytics company. Its products include Marchex Call Analytics, an analytics technology platform that provides data and insights to measure the performance of mobile, online, and offline advertising for advertisers and small business resellers; and Marchex Speech Analytics delivers actionable operational and advertising insights of inbound calls from consumer's interactions. The company also provides Marchex Omnichannel Analytics Cloud products, such as Marchex Search Analytics, a product for search marketers that drive phone calls from search campaigns; Marchex Display and Video Analytics, a product for marketers that buy digital display advertising; Marchex Site Analytics; and Marchex Social Analytics. It offers Marchex Audience Targeting leverages call data and can automatically build audience segments for display and social media platforms; and Marchex Call Marketplace, a mobile advertising network for businesses that depend on inbound phone calls to drive sales, as well as offer advertisers ad placements across various mobile and online media sources to deliver qualified calls to their businesses. The company also provides Local Leads platform, a service advertising solution for small business resellers, such as Yellow Pages providers and vertical marketing service providers to sell call advertising, search marketing, and other lead generation products through their existing sales channels to small business advertisers. In addition, it offers lead services, including pay-for-call, search marketing, and ad creation, as well as include features, such as call tracking, geo-targeting, campaign management, reporting, and analytics. The company offers its services through direct sales, reseller partnerships, and referral agreements and technology integration partners worldwide. Marchex, Inc. was founded in 2003 and is headquartered in Seattle, Washington.

About The Western Union

The Western Union Company provides money movement and payment services worldwide. The company operates in two segments, Consumer-to-Consumer and Business Solutions. The Consumer-to-Consumer segment facilitates money transfers between two consumers, primarily through a network of third-party agents. This segment offers international cross-border transfers and intra-country transfers, as well as money transfer transactions through Websites and mobile devices. The Business Solutions segment provides payment and foreign exchange solutions, primarily cross-border and cross-currency transactions for small and medium size enterprises, other organizations, and individuals. The company also facilitates bill payments from consumers to businesses and other organizations, as well as offers money order and other services. It serves primarily through a network of agents. The Western Union Company was incorporated in 2006 and is headquartered in Englewood, Colorado.

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