Contrasting Saga Communications (NASDAQ:SGA) and Direct Digital (NASDAQ:DRCT)

Direct Digital (NASDAQ:DRCT) and Saga Communications (NASDAQ:SGA) are both small-cap communication services companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

Direct Digital has a beta of 5.3, suggesting that its share price is 430% more volatile than the S&P 500. Comparatively, Saga Communications has a beta of -0.11, suggesting that its share price is 111% less volatile than the S&P 500.

Institutional & Insider Ownership

4.0% of Direct Digital shares are owned by institutional investors. Comparatively, 74.3% of Saga Communications shares are owned by institutional investors. 25.6% of Direct Digital shares are owned by insiders. Comparatively, 23.2% of Saga Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Direct Digital and Saga Communications”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Direct Digital	$34.69 million	0.04	-$18.95 million	($156.85)	-0.01
Saga Communications	$107.11 million	0.54	-$7.90 million	($1.38)	-6.63

Saga Communications has higher revenue and earnings than Direct Digital. Saga Communications is trading at a lower price-to-earnings ratio than Direct Digital, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Direct Digital and Saga Communications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Direct Digital	1	0	0	0	1.00
Saga Communications	1	2	0	0	1.67

Profitability

This table compares Direct Digital and Saga Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Direct Digital	-74.38%	N/A	-68.48%
Saga Communications	-8.55%	3.87%	2.90%

Summary

Saga Communications beats Direct Digital on 9 of the 12 factors compared between the two stocks.

About Direct Digital

Direct Digital Holdings, Inc. operates as an end-to-end full-service programmatic advertising platform. The company's platform primarily focuses on providing advertising technology, data-driven campaign optimization, and other solutions to underserved and less efficient markets on both the buy- and sell-side of the digital advertising ecosystem. It serves various industry verticals, such as travel, healthcare, education, financial services, consumer products, and other sectors with a focus on small and mid-sized businesses. The company was founded in 2018 and is headquartered in Houston, Texas.

About Saga Communications

Saga Communications, Inc., a media company, engages in acquiring, developing, and operating broadcast properties in the United States. The company's radio stations employ various programming formats, including classic hits, country, classic country, hot/soft/urban adult contemporary, oldies, classic rock, rock, and news/talk. It owns and operates FM and AM radio stations, and metro signals serving various markets. Saga Communications, Inc. was incorporated in 1986 and is headquartered in Grosse Pointe Farms, Michigan.