Toast (NYSE:TOST) and Acacia Research (NASDAQ:ACTG) Critical Contrast

Toast (NYSE:TOST) and Acacia Research (NASDAQ:ACTG) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Institutional and Insider Ownership

82.9% of Toast shares are owned by institutional investors. Comparatively, 86.7% of Acacia Research shares are owned by institutional investors. 10.0% of Toast shares are owned by company insiders. Comparatively, 1.7% of Acacia Research shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Toast and Acacia Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toast	7.14%	23.90%	15.77%
Acacia Research	-5.39%	0.44%	0.33%

Earnings and Valuation

This table compares Toast and Acacia Research”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toast	$6.15 billion	2.73	$342.00 million	$0.78	41.88
Acacia Research	$285.23 million	1.44	$21.68 million	($0.15)	-28.00

Toast has higher revenue and earnings than Acacia Research. Acacia Research is trading at a lower price-to-earnings ratio than Toast, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Toast and Acacia Research, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toast	0	11	17	0	2.61
Acacia Research	1	0	1	0	2.00

Toast presently has a consensus price target of $39.11, suggesting a potential upside of 19.72%. Acacia Research has a consensus price target of $6.00, suggesting a potential upside of 42.86%. Given Acacia Research’s higher probable upside, analysts plainly believe Acacia Research is more favorable than Toast.

Volatility & Risk

Toast has a beta of 1.74, meaning that its stock price is 74% more volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Summary

Toast beats Acacia Research on 12 of the 14 factors compared between the two stocks.

About Toast

Toast, Inc. operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, and India. The company offers software products for restaurant operations and point of sale, such as Toast POS, Toast now, multi-location management, kitchen display system, Toast mobile order and pay, Toast catering and events, Toast invoicing, Toast tables, and restaurant retail; and hardware products, including Toast flex, Toast flex for guest, Toast go 2, Toast tap, kiosks, and Delphi by Toast. It provides toast online ordering and toast takeout, first-party delivery toast delivery services, and third-party delivery integrations and orders hub; and loyalty, email marketing, and toast gift cards. In addition, the company offers payroll and team management, Sling by Toast, Toast pay card and payout, and tips manager, as well as partner-enabled products comprising insurance and benefits; supply chain and accounting products, such as xtraCHEF by toast; and financial technology solutions consisting of payment processing, toast capital, and purchase plans. Further, it offers reporting and analytics, Toast shop, and Toast partner connect and application programming interfaces. The company was formerly known as Opti Systems, Inc. and changed its name to Toast, Inc. in May 2012. Toast, Inc. was incorporated in 2011 and is headquartered in Boston, Massachusetts.

About Acacia Research

Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.