Contrasting MultiPlan (NYSE:MPLN) and Digital Media Solutions (NYSE:DMS)

MultiPlan (NYSE:MPLN) and Digital Media Solutions (NYSE:DMS) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Earnings & Valuation

This table compares MultiPlan and Digital Media Solutions’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MultiPlan $937.76 million 2.99 -$520.56 million ($0.15) -29.26
Digital Media Solutions $333.38 million 0.94 -$8.70 million $0.10 50.41

Digital Media Solutions has lower revenue, but higher earnings than MultiPlan. MultiPlan is trading at a lower price-to-earnings ratio than Digital Media Solutions, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

84.2% of MultiPlan shares are owned by institutional investors. Comparatively, 3.2% of Digital Media Solutions shares are owned by institutional investors. 17.7% of MultiPlan shares are owned by insiders. Comparatively, 87.7% of Digital Media Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares MultiPlan and Digital Media Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MultiPlan -8.95% -2.64% -0.77%
Digital Media Solutions 1.00% -11.84% 3.39%

Analyst Recommendations

This is a summary of current recommendations for MultiPlan and Digital Media Solutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MultiPlan 0 1 3 0 2.75
Digital Media Solutions 0 0 4 0 3.00

MultiPlan currently has a consensus price target of $8.50, suggesting a potential upside of 93.62%. Digital Media Solutions has a consensus price target of $14.63, suggesting a potential upside of 190.18%. Given Digital Media Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe Digital Media Solutions is more favorable than MultiPlan.

Summary

Digital Media Solutions beats MultiPlan on 9 of the 13 factors compared between the two stocks.

About MultiPlan

MultiPlan Corporation, together with its subsidiaries, provides data analytics and technology-enabled cost management, payment, and revenue integrity solutions to the healthcare industry in the United States. The company offers analytics-based services, which reduce medical costs through data-driven algorithms that detect claims over-charges and recommend or negotiate reimbursement; network-based services that reduce medical costs through contracted discounts with healthcare providers; and payment integrity services, which reduce medical costs by identifying and removing improper and unnecessary charges paid during the claim. It also provides health benefit plans, which features reference-based pricing and tools to engage health plan members and providers to make the use of benefits before and after care delivery. The company serves national insurance companies, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans, third party administrators, insurance bill review companies, Taft-Hartley plans, and other entities that pay medical bills in the commercial healthcare, government, workers' compensation, and auto medical markets. MultiPlan Corporation was founded in 1980 and is headquartered in New York, New York.

About Digital Media Solutions

Digital Media Solutions, Inc. is a marketing technology company, which engages in the provision of performance-driven brand and marketplace solutions to connect, consumers and advertisers. It operates through the following segments: Brand Direct, Marketplace, and Other. The Brand Direct segment comprises fees from the charge collected to customer when the company advertise directly for them under their brand name. The Marketplace segment include fees charge to customer from advertising their business under company’s brand name. The Other segment provides management of digital media services on behalf of customers as well as SaaS. The company was founded by Joseph L. Marinucci, Fernando Borghese, Luis A. Ruelas, Matt Goodman, and David Shteif in 2012 and is headquartered in Clearwater, FL.

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