Financial Analysis: Perion Network (NASDAQ:PERI) versus Saga Communications (NASDAQ:SGA)

Saga Communications (NASDAQ:SGA) and Perion Network (NASDAQ:PERI) are both small-cap communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares Saga Communications and Perion Network’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saga Communications	-8.24%	3.88%	2.90%
Perion Network	-2.17%	3.34%	2.50%

Risk and Volatility

Saga Communications has a beta of -0.1, indicating that its stock price is 110% less volatile than the S&P 500. Comparatively, Perion Network has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Saga Communications and Perion Network, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saga Communications	1	2	0	0	1.67
Perion Network	1	1	4	0	2.50

Perion Network has a consensus target price of $13.88, suggesting a potential upside of 41.44%. Given Perion Network’s stronger consensus rating and higher possible upside, analysts plainly believe Perion Network is more favorable than Saga Communications.

Valuation and Earnings

This table compares Saga Communications and Perion Network”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saga Communications	$107.11 million	0.60	-$7.90 million	($1.35)	-7.44
Perion Network	$440.96 million	0.87	-$7.93 million	($0.25)	-39.24

Saga Communications has higher earnings, but lower revenue than Perion Network. Perion Network is trading at a lower price-to-earnings ratio than Saga Communications, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

74.3% of Saga Communications shares are held by institutional investors. Comparatively, 68.1% of Perion Network shares are held by institutional investors. 23.2% of Saga Communications shares are held by insiders. Comparatively, 2.8% of Perion Network shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Perion Network beats Saga Communications on 8 of the 14 factors compared between the two stocks.

About Saga Communications

Saga Communications, Inc., a media company, engages in acquiring, developing, and operating broadcast properties in the United States. The company's radio stations employ various programming formats, including classic hits, country, classic country, hot/soft/urban adult contemporary, oldies, classic rock, rock, and news/talk. It owns and operates FM and AM radio stations, and metro signals serving various markets. Saga Communications, Inc. was incorporated in 1986 and is headquartered in Grosse Pointe Farms, Michigan.

About Perion Network

Perion Network Ltd. provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. It offers Wildfire, a content monetization platform; search monetization solutions, including website monetization, search mediation, and app monetization; and cross-channel digital advertising software as a service platform. The company also provides supply management platform; demand management platform for campaign planning and design; analytics platform, which provides information and performance insights; creative platform, a robust media platform; and an AI platform that uses machine learning to bring intelligence to the various phases of campaigns. In addition, it offers an actionable performance monitoring platform to support the various phases of campaign management; an online video player and integrated ad server to upload, manage, and stream video content; content monetization system, which integrates ads within the content layouts at the page level. Further, the company provides a publisher management system that provides analytics and performance optimization tools, as well as reports; search-demand management systems; monetization products that integrate and onboards demand vendors; and AI Systems. Additionally, it offers Intelligent HUB (iHUB), which connects the supply and demand sides of the marketplace; and strategic optimization of relevant traits (SORT), a provisional patent technology that eliminates the need for cookies. The company was formerly known as IncrediMail Ltd. and changed its name to Perion Network Ltd. in November 2011. Perion Network Ltd. was incorporated in 1999 and is headquartered in Holon, Israel.