Stagwell (NASDAQ:STGW – Get Rating) and WPP (NASDAQ:WPP – Get Rating) are both business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.
Valuation and Earnings
This table compares Stagwell and WPP’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Stagwell||$1.47 billion||1.53||$21.04 million||$0.27||28.26|
|WPP||$17.60 billion||0.65||$876.90 million||N/A||N/A|
WPP has higher revenue and earnings than Stagwell.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Stagwell presently has a consensus target price of $11.75, indicating a potential upside of 54.00%. Given Stagwell’s higher probable upside, analysts clearly believe Stagwell is more favorable than WPP.
Risk and Volatility
Stagwell has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, WPP has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.
This table compares Stagwell and WPP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
27.8% of Stagwell shares are owned by institutional investors. Comparatively, 4.0% of WPP shares are owned by institutional investors. 3.1% of Stagwell shares are owned by insiders. Comparatively, 1.0% of WPP shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Stagwell beats WPP on 8 of the 11 factors compared between the two stocks.
Stagwell Inc. provides digital transformation, performance media and data, consumer insights and strategy, and creativity and communications services. The company operates through three segments: Integrated Agencies Network, Media Network, and Communications Network. It designs and builds digital platforms and experiences that support the delivery of content, commerce, service, and sales; creates websites, mobile applications, back-end systems, content and data management systems, and other digital environments; designs and implements technology and data strategies; and develops software and related technology products, including cookie-less data platforms for audience targeting and activation, software tools for e-commerce applications, and text messaging applications for consumer engagement. The company also provides media buying and planning services; and strategic insights and guidance services that offers business content, product, communications, and media strategies. In addition, it offers strategy development, advertising creation, live events, cross platform engagement, and social media content services; and leadership, social media, executive positioning and visibility, strategic communication, public relation, and public affair services. Further, the company provides influencer marketing, brand insights, communications technology, and augmented reality services for in-house marketers, as well as tech-driven solutions. Stagwell Inc. is headquartered in New York, New York.
WPP plc, a creative transformation company, provides communications, experience, commerce, and technology services in North America, the United Kingdom, Western Continental Europe, the Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe. The company operates through three segments: Global Integrated Agencies, Public Relations, and Specialist Agencies. It offers plans and creates marketing and branding campaigns; designs and produces advertisements across various media; and provides media buying services, such as strategy and business development, media investment, data and technology, and content. The company also offers public relations advisory services to clients who are seeking to communicate with a range of stakeholders from consumers to governments and the business and financial communities; and specialist agency services. WPP plc was founded in 1985 and is based in London, the United Kingdom.
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