Magic Software Enterprises (NASDAQ:MGIC) & Rand Worldwide (OTCMKTS:RWWI) Financial Review

Magic Software Enterprises (NASDAQ:MGIC) and Rand Worldwide (OTCMKTS:RWWI) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Valuation and Earnings

This table compares Magic Software Enterprises and Rand Worldwide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magic Software Enterprises	$603.22 million	1.41	$36.88 million	$0.81	21.46
Rand Worldwide	$178.84 million	2.67	$46.59 million	$1.16	12.24

Rand Worldwide has lower revenue, but higher earnings than Magic Software Enterprises. Rand Worldwide is trading at a lower price-to-earnings ratio than Magic Software Enterprises, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Magic Software Enterprises has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Rand Worldwide has a beta of 0.09, meaning that its stock price is 91% less volatile than the S&P 500.

Institutional and Insider Ownership

24.7% of Magic Software Enterprises shares are held by institutional investors. Comparatively, 0.0% of Rand Worldwide shares are held by institutional investors. 4.5% of Magic Software Enterprises shares are held by insiders. Comparatively, 59.2% of Rand Worldwide shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Magic Software Enterprises and Rand Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magic Software Enterprises	6.61%	16.28%	8.96%
Rand Worldwide	27.20%	70.93%	26.54%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Magic Software Enterprises and Rand Worldwide, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magic Software Enterprises	0	2	1	0	2.33
Rand Worldwide	0	0	0	0	0.00

Magic Software Enterprises currently has a consensus target price of $18.00, indicating a potential upside of 3.57%. Given Magic Software Enterprises’ stronger consensus rating and higher possible upside, analysts plainly believe Magic Software Enterprises is more favorable than Rand Worldwide.

About Magic Software Enterprises

Magic Software Enterprises Ltd. provides proprietary application development, vertical software solutions, business process integration, information technologies (IT) outsourcing software services, and cloud-based services in Israel and internationally. Its Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. The company’s IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services. It also offers proprietary application platforms, such as Magic xpa for developing and deploying business applications; AppBuilder for building, deploying, and maintaining business applications; Magic xpi for application integration; Magic xpi cloud native; FactoryEye for virtualization of production data; Magic Data Management and Analytics Platform for data management; and Magic SmartUX for cross-platform mobile business applications. The company also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Cargo, a packaged software solution for managing air cargo ground handling; HR Pulse, a single-tenant software as a service tool; MBS Solution, a system for managing TV broadcast management; Nativ, a system for management of rehabilitation centers; and Mobisale, a system for sales and distribution field activities for consumer goods manufacturers and wholesalers. In addition, It provides software maintenance, support, training, and consulting services. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. The company was incorporated in 1983 and is headquartered in Or Yehuda, Israel.

About Rand Worldwide

Rand Worldwide, Inc. provides design automation and data management solutions primarily in the United States and Canada. It operates in five divisions: IMAGINiT Technologies, Rand Simulation, Facilities Management, ASCENT, and Rand 3D. The IMAGINiT Technologies division resells Autodesk solutions and system integration, and consulting services to customers in the manufacturing, infrastructure, building, and media and entertainment industries; resells Twinmotion visualization software, which provides design professionals to transform architectural models and designs into photorealistic images and immersive videos; offers a range of 3D laser scanning equipment and related software to help architectural, engineering, and construction firms; and sells its own proprietary software products and related services. The Rand Simulation division offers Ansys engineering simulation software to help organizations incorporate engineering simulation technology into the product development process; and provides simulation consulting services to enable organizations to achieve cost savings and design improvements through simulation technology. The Facilities Management division provides ARCHIBUS products for facilities management software for space planning, strategic planning, and lease/property administration; and offers various training, consulting, and support services for the ARCHIBUS products. The ASCENT division provides professional training materials and knowledge products for engineering software tools. The Rand 3D division offers training solutions for Dassault Systèmes and PTC products, including Pro/ENGINEER, CREO, and Windchill. Rand Worldwide, Inc. is based in Baltimore, Maryland.