Reviewing Wi-LAN (OTCMKTS:QTRHF) & Netcapital (NASDAQ:NCPL)

Wi-LAN (OTCMKTS:QTRHF) and Netcapital (NASDAQ:NCPL) are both small-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.

Valuation and Earnings

This table compares Wi-LAN and Netcapital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wi-LAN	$155.17 million	1.00	-$54.41 million	($0.43)	-3.02
Netcapital	$870,000.00	7.22	-$28.30 million	($15.49)	-0.05

Netcapital has lower revenue, but higher earnings than Wi-LAN. Wi-LAN is trading at a lower price-to-earnings ratio than Netcapital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for Wi-LAN and Netcapital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wi-LAN	0	0	0	0	0.00
Netcapital	1	0	0	0	1.00

Profitability

This table compares Wi-LAN and Netcapital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wi-LAN	-32.08%	-48.25%	-24.07%
Netcapital	-3,806.77%	-40.53%	-32.59%

Risk and Volatility

Wi-LAN has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, Netcapital has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500.

Institutional and Insider Ownership

30.7% of Netcapital shares are owned by institutional investors. 4.9% of Netcapital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Netcapital beats Wi-LAN on 8 of the 12 factors compared between the two stocks.

About Wi-LAN

Quarterhill Inc., together with its subsidiaries, operates in intelligent transportation system business in Canada and internationally. The company offers riteSuite, which offers mobility solutions, such as all-electronic tolling, dynamic pricing, agency interoperability, hosted mobility solutions, and machine learning; back-office solutions, which offers account management, customer service, violation processing, and technical services operations; roadside solutions, which offers onsite and remote maintenance and field operations services, including tolling facility support, lane equipment control, and cash management services; and international road dynamics products and services, which offers automated truck weigh stations, toll road systems and equipment, red light and speed enforcement systems, and traffic management and safety systems. It also provides VectorSense, a tire sensor suite; Vehicle Information-In-Motion traffic intelligence system, an integrated traffic control system; permanent Weigh-InMotion systems; portable slow speed Weigh-In-Motion systems; portable wheel load scales; traffic data collection products, vehicle and axle detection equipment, and automated vehicle identification services and equipment; and other hardware and software products and offerings. The company was formerly known as Wi-LAN Inc. and changed its name to Quarterhill Inc. in June 2017. Quarterhill Inc. was incorporated in 1992 and is headquartered in Toronto, Canada.

About Netcapital

Netcapital Inc. operates as a fintech company. It offers Netcapital.com, an SEC-registered funding portal that enables private companies to raise capital online, as well as allows investors to invest from anywhere in the world. The company also provides various services, including automated onboarding process and filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; and rolling closes which provides access to liquidity before final close date of offerings, as well as assistance with annual fillings and direct access to team for ongoing support. In addition, it offers advisor services, which includes incubation of technology start-ups; investors introduction; online marketing; website design and software development; message crafting including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, the company provides valuation services, such as business valuation, fairness and solvency opinions, ESOP feasibility and valuation, non-cash charitable contribution, economic analysis of damages, intellectual property appraisals, and compensation studies. Netcapital Inc. is based in Boston, Massachusetts.