Comparing Shutterstock (NYSE:SSTK) and Square Enix (OTCMKTS:SQNXF)

Shutterstock (NYSE:SSTK) and Square Enix (OTCMKTS:SQNXF) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Institutional and Insider Ownership

82.8% of Shutterstock shares are owned by institutional investors. 32.3% of Shutterstock shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Shutterstock and Square Enix”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shutterstock	$989.92 million	0.15	$45.50 million	($5.65)	-0.73
Square Enix	$1.98 billion	3.30	$195.47 million	$0.75	24.16

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

Analyst Ratings

This is a summary of current recommendations for Shutterstock and Square Enix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shutterstock	1	1	1	0	2.00
Square Enix	0	0	0	1	4.00

Shutterstock presently has a consensus target price of $7.00, suggesting a potential upside of 69.70%. Given Shutterstock’s higher possible upside, research analysts clearly believe Shutterstock is more favorable than Square Enix.

Profitability

This table compares Shutterstock and Square Enix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shutterstock	-22.87%	13.61%	5.49%
Square Enix	N/A	N/A	N/A

Volatility and Risk

Shutterstock has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Square Enix has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Summary

Square Enix beats Shutterstock on 8 of the 15 factors compared between the two stocks.

About Shutterstock

Shutterstock, Inc. provides platform to connect brands and businesses to high quality content in North America, Europe, and internationally. The company offers image services consisting of photographs, vectors, and illustrations, which is used in visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications, and others; footage services, including video clips, filmed by industry experts and cinema grade video effects in HD and 4K formats that are integrated into websites, social media, marketing campaigns, and cinematic productions; and music services comprising music tracks and sound effects, which are used to complement images and footage. It also provides 3 dimensional models consisting of 3D models used in various industries, such as advertising, media and video production, gaming, retail, education, design, and architecture; and generative AI content comprising images generated from algorithms trained with ethically sourced content. The company offers its services under the Shutterstock, Pond5, TurboSquid, PicMonkey, PremiumBeat, Splash News, Bigstock, and Offset brand names. In addition, it operates a collection of graphics interchange format visuals and stickers that supplies casual conversational content. The company serves corporate professionals and organizations, media and broadcast companies, and small and medium-sized businesses, and individual creators through digital, live sales, and client management channels. Shutterstock, Inc. was founded in 2003 and is headquartered in New York, New York.

About Square Enix

Square Enix Holdings Co., Ltd. operates in the content and service businesses in Japan and internationally. It operates through Digital Entertainment Business, Amusement Business, Publishing Business, and Rights Property Business. The company plans, develops, sells, and manages digital entertainment content primarily in the form of computer games. It is also involved in the operation of amusement facilities; and planning, development, manufacture, sale, and rental of arcade game machines and related products for amusement facilities. In addition, the company publishes and licenses comic books, magazines, game-related books, periodicals, etc. Further, it plans, produces, distributes, and licenses secondary works; and offers content under the SQUARE ENIX PRODUCTS brand; and stuffed toys and utility goods under the SQEX TOYS brand. The company was incorporated in 1975 and is headquartered in Tokyo, Japan.