United Internet (OTCMKTS:UDIRF – Get Free Report) and Dropbox (NASDAQ:DBX – Get Free Report) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.
Insider & Institutional Ownership
94.8% of Dropbox shares are owned by institutional investors. 28.6% of Dropbox shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares United Internet and Dropbox”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| United Internet | $6.85 billion | 0.77 | $114.57 million | $0.74 | 36.94 |
| Dropbox | $2.55 billion | 3.00 | $452.30 million | $1.64 | 17.25 |
Dropbox has lower revenue, but higher earnings than United Internet. Dropbox is trading at a lower price-to-earnings ratio than United Internet, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
United Internet has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Dropbox has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.
Profitability
This table compares United Internet and Dropbox’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| United Internet | 1.90% | 2.14% | 1.01% |
| Dropbox | 19.17% | -61.31% | 19.38% |
Analyst Recommendations
This is a breakdown of recent recommendations for United Internet and Dropbox, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| United Internet | 1 | 0 | 0 | 0 | 1.00 |
| Dropbox | 0 | 3 | 0 | 0 | 2.00 |
Dropbox has a consensus target price of $30.3333, indicating a potential upside of 7.22%. Given Dropbox’s stronger consensus rating and higher possible upside, analysts plainly believe Dropbox is more favorable than United Internet.
Summary
Dropbox beats United Internet on 10 of the 13 factors compared between the two stocks.
About United Internet
United Internet AG, through its subsidiaries, operates as an Internet service provider worldwide. The company operates through Consumer Access, Business Access, Consumer Applications, and Business Applications segments. It offers landline-based broadband and mobile internet products, including home networks, online storage, telephony, and IPTV for private users; and telecommunication products ranging from fiber-optic direct connections to tailored ICT solutions, which include voice, data, and network solutions, as well as infrastructure services to national and international carriers and ISPs. The company also provides applications and services for home users, such as personal information management applications comprising email, to-do lists, appointments, and addresses; and online cloud storage, as well as domains and website solutions. In addition, it provides business applications for freelancers and small to medium enterprises, such as domains, websites, web hosting, servers, cloud solutions, e-shops, group work, online cloud storage, and office software. It offers its access products through the yourfone, smartmobile.de, 1&1, and 1&1 Versatel brands; and applications through GMX, mail.com, WEB.DE, home.pl, Arsys, STRATO, IONOS, Fasthosts, we22, InterNetX, united-domains, and World4You brand names. In addition, the company offers customers professional services in the fields of active domain management; performance-based advertising and sales services under the Sedo brand name; online advertising services under the United Internet Media brand name; and white-label website builder services under the we22 brand, as well as sells IT hardware. The company was incorporated in 1988 and is headquartered in Montabaur, Germany.
About Dropbox
Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.
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