Capcom (OTCMKTS:CCOEY) & Spotify Technology (NYSE:SPOT) Financial Review

Capcom (OTCMKTS:CCOEY) and Spotify Technology (NYSE:SPOT) are both large-cap communication services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Risk and Volatility

Capcom has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Spotify Technology has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Valuation & Earnings

This table compares Capcom and Spotify Technology”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capcom	$1.30 billion	10.07	$360.28 million	$0.53	23.13
Spotify Technology	$18.81 billion	6.51	$2.50 billion	$15.08	39.43

Spotify Technology has higher revenue and earnings than Capcom. Capcom is trading at a lower price-to-earnings ratio than Spotify Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Capcom and Spotify Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capcom	29.80%	25.64%	21.23%
Spotify Technology	15.74%	35.64%	21.23%

Analyst Recommendations

This is a summary of current ratings and target prices for Capcom and Spotify Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capcom	0	2	0	0	2.00
Spotify Technology	1	9	23	1	2.71

Spotify Technology has a consensus target price of $620.07, suggesting a potential upside of 4.27%. Given Spotify Technology’s stronger consensus rating and higher possible upside, analysts clearly believe Spotify Technology is more favorable than Capcom.

Insider and Institutional Ownership

84.1% of Spotify Technology shares are held by institutional investors. 0.4% of Spotify Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Spotify Technology beats Capcom on 12 of the 14 factors compared between the two stocks.

About Capcom

Capcom Co., Ltd. plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally. It operates through Digital Contents, Arcade Operations, Amusement Equipments, and Other Businesses segments. The Digital Contents segment develops and sells digital game content for consumer home video game platforms, as well as mobile content and PC online games. The Arcade Operations segment operates Plaza Capcom amusement facilities primarily in commercial complexes, as well as hosts various events. The Amusement Equipments segment is involved in the development, manufacture, and sale of software, frames and LCD devices for gaming machines. The Other Businesses segment engages in the adapting game content into movies, animated television programs, music CDs, and merchandise; and devoting resources to esports. Capcom Co., Ltd. was incorporated in 1979 and is headquartered in Osaka, Japan.

About Spotify Technology

Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. This segment sells directly to the end users. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its users on their computers, tablets, and compatible mobile devices. The company also offers sales, distribution and marketing, contract research and development, and customer and other support services. Spotify Technology S.A. was incorporated in 2006 and is based in Luxembourg City, Luxembourg.