IAC/InterActiveCorp (NASDAQ:IAC) and Match Group, Inc. (NASDAQ:MTCH) are both Technology companies that recently hit new low. Naturally, this has created a bit of a stir amongst investors. We will compare the two companies across various metrics including growth, profitability, risk, return, dividends, and valuation to determine if one is a better choice than the other.
IAC/InterActiveCorp (NASDAQ:IAC) operates in the Internet Information Providers segment of the Technology sector. The company has grown sales at a 8.80% annual rate over the past five years, putting it in the medium growth category. IAC has a net profit margin of 11.80% and is more profitable than the average company in the Internet Information Providers industry. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 18.50%, which is worse than the Internet Information Providers industry average ROE.
Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is 1.17. Company trades at a P/E ratio of 27.53, and is less expensive than the average stock in the Internet Information Providers industry. The average investment recommendation for IAC, taken from a group of Wall Street Analysts, is 1.70, or a buy.
Over the past three months, IAC/InterActiveCorp insiders have been net buyers, dumping a net of -674,426 shares. This implies that insiders have been feeling relatively bearish about the outlook for IAC. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. IAC has a beta of 1.10 and therefore an above average level of market volatility.
Match Group, Inc. (NASDAQ:MTCH) operates in the Internet Information Providers segment of the Technology sector. MTCH’s asset turnover ratio is 0.58 and the company has financial leverage of 3.18. MTCH’s return on equity of 78.10% is better than the Internet Information Providers industry average.
Stock has a payout ratio of 0.00%. According to this ratio, MTCH should be able to continue making payouts at these levels. The company trades at a free cash flow yield of 0.84 and has a P/E of 18.84. Compared to the average company in the 32.03 space, MTCH is relatively cheap. The average analyst recommendation for MTCH is 2.10, or a buy.
Match Group, Inc. insiders have bought a net of 596,714 shares during the past three months, which implies that the company’s top executives have been feeling bullish about the stock’s outlook.
IAC/InterActiveCorp (NASDAQ:MTCH) scores higher than Match Group, Inc. (NASDAQ:IAC) on 6 of the 13 measures compared between the two companies. MTCH has the better fundamentals, scoring higher on profitability, efficiency and return metrics. MTCH has better insider activity and sentiment signals.