Critical Analysis: Innodata (NASDAQ:INOD) and ICF International (NASDAQ:ICFI)

ICF International (NASDAQ:ICFI) and Innodata (NASDAQ:INOD) are both small-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares ICF International and Innodata’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ICF International	4.86%	11.53%	5.73%
Innodata	14.66%	37.79%	20.92%

Analyst Ratings

This is a summary of current recommendations and price targets for ICF International and Innodata, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ICF International	0	2	2	0	2.50
Innodata	0	2	1	1	2.75

ICF International currently has a consensus target price of $105.00, indicating a potential upside of 23.22%. Innodata has a consensus target price of $130.00, indicating a potential upside of 127.51%. Given Innodata’s stronger consensus rating and higher possible upside, analysts clearly believe Innodata is more favorable than ICF International.

Insider and Institutional Ownership

94.1% of ICF International shares are held by institutional investors. Comparatively, 30.7% of Innodata shares are held by institutional investors. 1.7% of ICF International shares are held by insiders. Comparatively, 11.8% of Innodata shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

ICF International has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Innodata has a beta of 2.88, indicating that its stock price is 188% more volatile than the S&P 500.

Earnings and Valuation

This table compares ICF International and Innodata”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ICF International	$1.82 billion	0.84	$91.59 million	$4.83	17.64
Innodata	$317.16 million	6.19	$32.18 million	$1.32	43.29

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

Summary

Innodata beats ICF International on 10 of the 15 factors compared between the two stocks.

About ICF International

ICF International, Inc. provides management, technology, and policy consulting and implementation services to government and commercial clients in the United States and internationally. The company researches critical policy, industry, stakeholder issues, trends, and behaviors; measures and evaluates results and their impact; and provides strategic planning and advisory services to its clients on how to navigate societal, business, market, business, communication, and technology challenges. It also identifies, defines, and implements policies, plans, programs, and business tools through a range of standard and customized methodologies for its clients' business context; conducts survey research; collects and analyzes various data to understand critical issues and options for its clients; and provides actionable business intelligence, as well as information and data management solutions that allow integrated and purpose-driven data usage. In addition, the company provides solutions to optimize the customer and citizen experience; modernizes IT systems; and cyber security solutions that support the range of cyber security missions and protect IT infrastructures in the face of relentless threats, as well as designs, develops, and implements technology systems and business tools that are key to its clients' mission or business performance. Further, it informs and engages its clients' constituents, customers, and employees through public relations, branding and marketing, multichannel and strategic communications, and reputation issues management. The company serves energy, environment, infrastructure, and disaster recovery; health and social programs; and security and other civilian and commercial markets. The company was formerly known as ICF Consulting Group Holdings, LLC and changed its name to ICF International, Inc. in 2006. ICF International, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

About Innodata

Innodata Inc. operates as a global data engineering company in the United States, the United Kingdom, the Netherlands, Canada, and internationally. The company operates through three segments: Digital Data Solutions (DDS), Synodex, and Agility. The DDS segment engages in the provision of artificial intelligence (AI) data preparation services; collecting or creating training data; annotating training data; and training AI algorithms for its customers, as well as AI model deployment and integration services. This segment also provides a range of data engineering support services, including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Synodex segment offers an industry platform that transforms medical records into useable digital data with its proprietary data models or client data models. The Agility segment provides an industry platform that offers marketing communications and public relations professionals to target and distribute content to journalists and social media influencers; and to monitor and analyze global news channels, such as print, web, radio, and TV, as well as social media channels. It serves banking, insurance, financial services, technology, digital retailing, and information/media sectors through its professional staff, senior management, and direct sales personnel. The company was formerly known as Innodata Isogen, Inc. and changed its name to Innodata Inc. in June 2012. Innodata Inc. was incorporated in 1988 and is headquartered in Ridgefield Park, New Jersey.