Comparing Acacia Research (ACTG) and Quarterhill (QTRH)

Acacia Research (NASDAQ: ACTG) and Quarterhill (NASDAQ:QTRH) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.

Earnings & Valuation

This table compares Acacia Research and Quarterhill’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Research $65.40 million 3.33 $22.18 million $2.97 1.45
Quarterhill $134.71 million 1.08 $10.22 million $0.52 2.37

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

Risk & Volatility

Acacia Research has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Quarterhill has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Acacia Research and Quarterhill, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Research 1 0 1 0 2.00
Quarterhill 0 0 1 0 3.00

Acacia Research presently has a consensus target price of $6.50, suggesting a potential upside of 51.16%. Given Acacia Research’s higher possible upside, analysts plainly believe Acacia Research is more favorable than Quarterhill.

Profitability

This table compares Acacia Research and Quarterhill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Research 1.66% 42.95% 39.10%
Quarterhill 3.89% 21.36% 17.74%

Institutional and Insider Ownership

61.7% of Acacia Research shares are owned by institutional investors. Comparatively, 14.9% of Quarterhill shares are owned by institutional investors. 11.0% of Acacia Research shares are owned by company 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.

Dividends

Quarterhill pays an annual dividend of $0.04 per share and has a dividend yield of 3.3%. Acacia Research does not pay a dividend. Quarterhill pays out 7.7% of its earnings in the form of a dividend.

Summary

Acacia Research beats Quarterhill on 10 of the 15 factors compared between the two stocks.

About Acacia Research

Acacia Research Corporation, together with its subsidiaries, invests in, licenses, and enforces patented technologies. It assists patent owners with the prosecution and development of their patent portfolios; protection of their patented inventions from unauthorized use; generation of licensing revenue from users of their patented technologies; and enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The company owns or controls the rights to various patent portfolios, which include U.S. patents and foreign counterparts covering technologies used in a range of industries. It has executed approximately 1,550 license agreements and 193 patent portfolio licensing and enforcement programs. Acacia Research Corporation was founded in 1992 and is headquartered in Newport Beach, California.

About Quarterhill

Quarterhill Inc. focuses on acquisition and management of technology companies that provides products and services worldwide. Its Technology segment licenses patent technologies to approximately 355 companies. Its patent portfolios include patents relating to 3D television, phased loop semiconductor, semiconductor manufacturing and packaging, medical stent, intelligent personal assistant, streaming video, semiconductor clocking, LED lighting, smart meter monitoring, non-volatile flash memory and other memory, building automation, enhanced image processing, computer gaming, and various other technologies; automotive headlight assemblies, microcontrollers applicable to safety-critical aerospace, and CMOS image sensors; and medical, industrial, and automotive applications. Its Mobility segment provides automated truck weigh stations; toll road systems and equipment; traffic management and safety systems; VectorSense, a tire sensor suite; Vehicle Information-In-Motion, a traffic intelligence system; integrated traffic control systems; permanent and portable slow speed weigh-in-motion systems; portable wheel load scales; traffic data collection products; vehicle and axle detection equipment; and automated vehicle identification, and other hardware and software products. It serves intelligent transportation systems industry through salespeople, distributors, agents, other contractors, and systems integrators, as well as directly. Its Factory segment creates and licenses enterprise asset management (EAM) software solutions to asset intensive industries through its salesforce, as well as Internet. It offers WorkAlign, a product suite, which consists of integrated products, such as scheduler, IIoT, mobile for EAM, maintenance budgeting, warranty tracker, and analytics; and consulting services. The company was formerly known as Wi-LAN Inc. and changed its name to Quarterhill Inc. in June 2017. Quarterhill Inc. was incorporated in 1992 and is headquartered in Ottawa, Canada.

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