Comparing SofTech (OTCMKTS:SOFT) and Magic Software Enterprises (NASDAQ:MGIC)

SofTech (OTCMKTS:SOFT) and Magic Software Enterprises (NASDAQ:MGIC) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Volatility and Risk

SofTech has a beta of -1.33, meaning that its share price is 233% less volatile than the S&P 500. Comparatively, Magic Software Enterprises has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Insider & Institutional Ownership

24.7% of Magic Software Enterprises shares are owned by institutional investors. 28.6% of SofTech shares are owned by company insiders. Comparatively, 4.5% of Magic Software Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares SofTech and Magic Software Enterprises”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SofTech	N/A	N/A	N/A	N/A	N/A
Magic Software Enterprises	$552.52 million	1.79	$36.88 million	$0.78	25.88

Magic Software Enterprises has higher revenue and earnings than SofTech.

Analyst Recommendations

This is a summary of recent ratings for SofTech and Magic Software Enterprises, as reported by MarketBeat.com.

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

Magic Software Enterprises has a consensus target price of $18.00, suggesting a potential downside of 10.85%. Given SofTech’s higher probable upside, equities analysts clearly believe SofTech is more favorable than Magic Software Enterprises.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SofTech	N/A	N/A	N/A
Magic Software Enterprises	6.58%	15.85%	8.89%

Summary

Magic Software Enterprises beats SofTech on 8 of the 10 factors compared between the two stocks.

About SofTech

SofTech, Inc. develops, markets, distributes, and supports computer aided design (CAD), and product data management and collaboration computer solutions for the product lifecycle management (PLM) industry primarily in North America, Europe, and Asia. The company offers ProductCenter, a collaborative PLM solution, which manages the engineering data and electronic files of discrete parts designed in various used third party proprietary design technologies; delivers a combination of document management, design integration, configuration control, change management, bill of materials management, and integration capability with other enterprise-wide systems; enables secure management of product information; and allows engineers and the design chain to manage, share, modify, and track product data and documents in the product development lifecycle. Its ProductCenter technology also allows employees, customers, suppliers, and other team members to securely exchange product information while maintaining a centralized database of critical product data; and enables integration with other business applications, such as enterprise resource planning, supply chain management, and customer relationship management for data exchange across the product lifecycle. In addition, the company offers Connector platform, a technology that allows for a direct interface between Aras Corporation’s Innovator solution and CAD products. SofTech, Inc. markets and distributes its products and services primarily through a direct sales force and its service organization, as well as through resellers. The company was founded in 1969 and is headquartered in Lowell, Massachusetts.

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.