Comparing Internet Initiative Japan (NASDAQ:IIJI) & Synacor (NASDAQ:SYNC)

Internet Initiative Japan (NASDAQ:IIJI) and Synacor (NASDAQ:SYNC) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Internet Initiative Japan and Synacor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Internet Initiative Japan 2.01% 8.67% 4.11%
Synacor -5.20% -11.02% -6.18%

Analyst Ratings

This is a summary of current recommendations for Internet Initiative Japan and Synacor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Internet Initiative Japan 0 0 0 0 N/A
Synacor 0 2 1 0 2.33

Valuation and Earnings

This table compares Internet Initiative Japan and Synacor’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Internet Initiative Japan $1.59 billion 0.56 $45.98 million $0.52 18.27
Synacor $143.88 million 0.41 -$7.55 million ($0.13) -11.62

Internet Initiative Japan has higher revenue and earnings than Synacor. Synacor is trading at a lower price-to-earnings ratio than Internet Initiative Japan, indicating that it is currently the more affordable of the two stocks.

Dividends

Internet Initiative Japan pays an annual dividend of $0.05 per share and has a dividend yield of 0.5%. Synacor does not pay a dividend. Internet Initiative Japan pays out 9.6% of its earnings in the form of a dividend. Internet Initiative Japan has increased its dividend for 3 consecutive years.

Risk and Volatility

Internet Initiative Japan has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Synacor has a beta of 0.11, suggesting that its stock price is 89% less volatile than the S&P 500.

Institutional & Insider Ownership

0.5% of Internet Initiative Japan shares are owned by institutional investors. Comparatively, 26.5% of Synacor shares are owned by institutional investors. 6.7% of Internet Initiative Japan shares are owned by insiders. Comparatively, 25.3% of Synacor shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Internet Initiative Japan beats Synacor on 11 of the 15 factors compared between the two stocks.

About Internet Initiative Japan

Internet Initiative Japan Inc. offers Internet connectivity, WAN, outsourcing, systems integration, and equipment sales services in Japan. It operates in two segments, Network Services and Systems Integration Business, and ATM Operation Business. The company's Internet connectivity services for enterprise include IP services and IIJ data center connectivity services, IIJ FiberAccess/F and IIJ DSL/F services, IIJ mobile services, and dial-up access services, as well as other Internet connectivity services comprising IIJ ISDN/F and IIJ line management/F services. Its Internet connectivity services for consumers consist of various service, including ADSL, fiber optic, WiMAX, 3G, and LTE wireless data communication services under the IIJmio and hi-ho brand names. The company also offers WAN services, a closed network service primarily using dedicated lines, as well as wide-area Ethernet services and IP-VPN services to corporate customers; outsourcing services that comprise security-related, network-related, server-related, data center-related, and IIJ GIO/Hosting package services for non-customizable hosting package cloud computing services; and customer support and help desk solutions, and IP phone services. In addition, it provides systems integration services, which include consulting, project planning, systems design, and development of network systems, which focus on Internet business systems, and Intranet and Extranet corporate information systems; and systems operation and maintenance services. Further, the company sells routers, iPads, and other equipment, as well as software; and provides automated teller machine (ATM) services. As of June 29, 2018, it operated 29 primary points of presence (POP) for dedicated access and 1 universal POP for nationwide dial-up access; 27 Internet data centers; and 1,096 ATMs. The company was founded in 1992 and is headquartered in Tokyo, Japan.

About Synacor

Synacor, Inc. operates as a technology development, multiplatform services, and revenue partner for video, Internet, and communications providers; and device manufacturers, governments, and enterprises in the United States and internationally. It enables its customers to provide their consumers engaging, multiscreen experiences with products that require scale, and actionable data and implementation. The company, through its managed portals and advertising solutions, enables its customers to earn revenue by monetizing media among their consumers. It also offers recurring and fee-based revenue solutions, such as Cloud ID Authentication that offers home-based auto-authentication and social login, which enhances the consumer experience by reducing login failures; Email/Collaboration Services that include white-label hosting, security, and migration; and paid content and premium services. The company was formerly known as CKMP, Inc. and changed its name to Synacor, Inc. in July 2001. Synacor, Inc. was founded in 1998 and is headquartered in Buffalo, New York.

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