Emerald (NYSE:EEX – Get Rating) and Newtek Business Services (NASDAQ:NEWT – Get Rating) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Emerald and Newtek Business Services, as reported by MarketBeat.
Get Emerald alerts:| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Emerald | 0 | 0 | 0 | 0 | N/A |
| Newtek Business Services | 0 | 1 | 0 | 0 | 2.00 |
Newtek Business Services has a consensus target price of $22.00, indicating a potential upside of 45.12%. Given Newtek Business Services' higher probable upside, analysts plainly believe Newtek Business Services is more favorable than Emerald.
Valuation & Earnings
This table compares Emerald and Newtek Business Services' top-line revenue, earnings per share (EPS) and valuation.| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Emerald | $145.50 million | 1.56 | -$78.10 million | ($0.57) | -5.75 |
| Newtek Business Services | $108.49 million | 3.40 | $84.14 million | $2.54 | 5.97 |
Newtek Business Services has lower revenue, but higher earnings than Emerald. Emerald is trading at a lower price-to-earnings ratio than Newtek Business Services, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Emerald and Newtek Business Services' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Emerald | 1.95% | -39.51% | 4.21% |
| Newtek Business Services | 109.21% | 16.36% | 6.18% |
Insider & Institutional Ownership
20.6% of Emerald shares are held by institutional investors. Comparatively, 17.5% of Newtek Business Services shares are held by institutional investors. 3.5% of Emerald shares are held by company insiders. Comparatively, 5.7% of Newtek Business Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Emerald has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Newtek Business Services has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.
Summary
Newtek Business Services beats Emerald on 9 of the 12 factors compared between the two stocks.
About Emerald
(Get Rating)
Emerald Holding, Inc. operates business-to-business (B2B) trade shows in the United States. The company operates trade shows in various industry sectors, including retail, design and construction, technology, equipment, and safety and security. It also operates content and content-marketing websites, and related digital products, as well as produce publications. In addition, the company operates Elastic Suite platform that streamlines the wholesale buying process for brands and retail buyers; and Flex platform. Emerald Expositions Events, Inc. was incorporated in 2013 and is based in New York, New York.
About Newtek Business Services
(Get Rating)
Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also seeks to invest in early stage businesses. The firm seeks to makes both debt and equity investments. Under debt investments, it focuses on first lien loans, which have terms of 1 to 25 years; second lien loans, which have terms of 5 to 25 years, and unsecured loans, which are provided to meet short-term funding needs and are repaid within 6 to 12 months. It operates through Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, and Capcos segments. The company originates small business administration loans for the purpose of acquiring commercial real estate, machinery, equipment, and inventory, as well as to refinance debt and fund franchises, working capital, and business acquisitions; and offers small business loan servicing and consulting services to the Federal Deposit Insurance Corporation and various other financial institutions, as well as provides management services. Its electronic payment processing services include credit and debit card processing, check approval, ancillary processing equipment and software to merchants, eCommerce, electronic solutions to accept non-cash payments, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs. The company also provides Website hosting, dedicated server, and cloud hosting services; Web design and development; Internet marketing; data storage and backup and other related services; and ecommerce services, such as payment processing, online shopping cart tools, Website design and Web related services; Accounts Receivable Financing, and The Secure Gateway. In addition, it offers Newtek Advantage, a mobile, real-time operating platform enabling a business to access data on a smartphone, tablet, laptop, or PC for eCommerce, credit/debit transactions, Website statistics, payroll, insurance, and business loans. Further, the company sells personal, commercial, and health/benefits lines of insurance products; and payroll management processing and employee tax filing services. It has strategic alliances with American International Group, CTAA, Navy Federal Credit Union, Credit Union National Association, Pershing, and others to provide agent services to small business clients. The firm seeks to invest in New York and Louisiana area. The firm seeks to invest $0.3 million to $3 million in businesses. It provides small business terms loans ranging from $0.05 million to $10 million. The firm also provides account receivable financing ranging from $0.05 million to $1.5 million. It also provides $0.05 million to $10 million financing to owner occupied real estate businesses whose average net income over the last 2 years must not exceed $2.5 million. Newtek Business Services Corp.,was founded in 1998 and converted to a BDC company in 2014 and is headquartered in Boca Raton, Florida with additional offices in Lake Success, New York, Garden City, New York; Miami, Florida; Milwaukee, Wisconsin; New Orleans, Louisiana; and New York, New York.
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