NEWTEK Business Services (NASDAQ:NEWT) and LiveWorld (OTCMKTS:LVWD) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, risk, earnings, dividends, analyst recommendations, institutional ownership and valuation.

Valuation and Earnings

This table compares NEWTEK Business Services and LiveWorld’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NEWTEK Business Services $49.51 million 9.07 $35.68 million $1.94 11.68
LiveWorld $7.71 million 0.05 -$640,000.00 N/A N/A
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NEWTEK Business Services has higher revenue and earnings than LiveWorld.

Analyst Ratings

This is a breakdown of recent ratings and target prices for NEWTEK Business Services and LiveWorld, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NEWTEK Business Services 0 2 0 0 2.00
LiveWorld 0 0 0 0 N/A

NEWTEK Business Services presently has a consensus price target of $19.00, suggesting a potential downside of 16.11%. Given NEWTEK Business Services’ higher possible upside, research analysts plainly believe NEWTEK Business Services is more favorable than LiveWorld.

Volatility and Risk

NEWTEK Business Services has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, LiveWorld has a beta of 2.53, suggesting that its stock price is 153% more volatile than the S&P 500.

Profitability

This table compares NEWTEK Business Services and LiveWorld’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NEWTEK Business Services 61.37% 14.42% 6.11%
LiveWorld -5.60% -49.76% -23.89%

Institutional & Insider Ownership

17.1% of NEWTEK Business Services shares are held by institutional investors. 6.7% of NEWTEK Business Services shares are held by company insiders. Comparatively, 16.3% of LiveWorld shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

NEWTEK Business Services beats LiveWorld on 8 of the 10 factors compared between the two stocks.

NEWTEK Business Services Company Profile

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also seeks to invest in early stage businesses. The firm seeks to makes both debt and equity investments. Under debt investments, it focuses on first lien loans, which have terms of 1 to 25 years; second lien loans, which have terms of 5 to 25 years, and unsecured loans, which are provided to meet short-term funding needs and are repaid within 6 to 12 months. It operates through Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, and Capcos segments. The company originates small business administration loans for the purpose of acquiring commercial real estate, machinery, equipment, and inventory, as well as to refinance debt and fund franchises, working capital, and business acquisitions; and offers small business loan servicing and consulting services to the Federal Deposit Insurance Corporation and various other financial institutions, as well as provides management services. Its electronic payment processing services include credit and debit card processing, check approval, ancillary processing equipment and software to merchants, eCommerce, electronic solutions to accept non-cash payments, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs. The company also provides Website hosting, dedicated server, and cloud hosting services; Web design and development; Internet marketing; data storage and backup and other related services; and ecommerce services, such as payment processing, online shopping cart tools, Website design and Web related services; Accounts Receivable Financing, and The Secure Gateway. In addition, it offers Newtek Advantage, a mobile, real-time operating platform enabling a business to access data on a smartphone, tablet, laptop, or PC for eCommerce, credit/debit transactions, Website statistics, payroll, insurance, and business loans. Further, the company sells personal, commercial, and health/benefits lines of insurance products; and payroll management processing and employee tax filing services. It has strategic alliances with American International Group, CTAA, Navy Federal Credit Union, Credit Union National Association, Pershing, and others to provide agent services to small business clients. The firm seeks to invest in New York and Louisiana area. The firm seeks to invest $0.3 million to $3 million in businesses. It provides small business terms loans ranging from $0.05 million to $10 million. The firm also provides account receivable financing ranging from $0.05 million to $1.5 million. It also provides $0.05 million to $10 million financing to owner occupied real estate businesses whose average net income over the last 2 years must not exceed $2.5 million. Newtek Business Services Corp., formerly known as Newtek Business Services Inc., was incorporated on August 26, 2013 and is headquartered in Lake Success, New York with additional offices in Garden City, New York; Miami, Florida; Milwaukee, Wisconsin; New Orleans, Louisiana; and New York, New York.

LiveWorld Company Profile

LiveWorld, Inc. provides social media solutions for global brands. The company is involved in developing strategy, creating and publishing content, engaging customers, moderating content, managing crises, and gleaning insight from social media. It offers engagement services, including social architecture, audit, and competitive analysis; content programming plans and authoring; day-to-day online engagement and community management; social media crisis management; highlights and custom reporting; and strategy consulting services. The company also provides content moderation services, such as moderation plans and guidelines, moderator selection and training, hourly content moderation, moderation management, moderation program model, and highlights and custom reporting. In addition, it offers insight services comprising setup, customization, training, and support; management, tagging, and analysis; and listening and monitoring of the social Web. Further, it provides listening services that include brand monitoring, social Web listening, market research listening programs, customizable listening track offerings, human management and analysis, and real-time monitoring or 30-day rear-view listening reports. Additionally, the company offers LiveEngage, a social content marketing suite that enables brand managers or customer support agents to directly respond to escalated content; LiveMod, a content moderation software enables human moderators to accept, reject, and escalate content in context; and LiveInsight software, an analytics and insights solution designed to engage and scale human review and analysis. It serves various industries, including retail, consumer packaged goods, pharmaceutical, financial and travel services, healthcare, automotive, technology, and media and entertainment. The company was formerly known as Talk City, Inc. and changed its name to Liveworld, Inc. in May 2001. Liveworld, Inc. was founded in 1996 and is headquartered in San Jose, California.



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