Analyzing Meta Platforms (NASDAQ:META) & Shutterstock (NYSE:SSTK)

Shutterstock (NYSE:SSTK) and Meta Platforms (NASDAQ:META) are both communication services companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Dividends

Shutterstock pays an annual dividend of $1.44 per share and has a dividend yield of 33.6%. Meta Platforms pays an annual dividend of $2.10 per share and has a dividend yield of 0.3%. Shutterstock pays out -25.5% of its earnings in the form of a dividend. Meta Platforms pays out 7.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Shutterstock has increased its dividend for 6 consecutive years and Meta Platforms has increased its dividend for 1 consecutive years. Shutterstock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Shutterstock has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Meta Platforms has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Earnings & Valuation

This table compares Shutterstock and Meta Platforms”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shutterstock	$989.92 million	0.16	$45.50 million	($5.65)	-0.76
Meta Platforms	$200.97 billion	9.13	$60.46 billion	$26.55	27.13

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

Profitability

This table compares Shutterstock and Meta Platforms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shutterstock	-22.87%	13.61%	5.49%
Meta Platforms	29.83%	33.18%	20.07%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Shutterstock and Meta Platforms, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shutterstock	1	1	1	0	2.00
Meta Platforms	0	10	44	3	2.88

Shutterstock currently has a consensus price target of $7.00, suggesting a potential upside of 63.17%. Meta Platforms has a consensus price target of $791.86, suggesting a potential upside of 9.92%. Given Shutterstock’s higher possible upside, research analysts clearly believe Shutterstock is more favorable than Meta Platforms.

Institutional and Insider Ownership

82.8% of Shutterstock shares are owned by institutional investors. Comparatively, 79.9% of Meta Platforms shares are owned by institutional investors. 32.3% of Shutterstock shares are owned by insiders. Comparatively, 13.5% of Meta Platforms shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Meta Platforms beats Shutterstock on 12 of the 18 factors compared between the two stocks.

About Shutterstock

Shutterstock, Inc. provides platform to connect brands and businesses to high quality content in North America, Europe, and internationally. The company offers image services consisting of photographs, vectors, and illustrations, which is used in visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications, and others; footage services, including video clips, filmed by industry experts and cinema grade video effects in HD and 4K formats that are integrated into websites, social media, marketing campaigns, and cinematic productions; and music services comprising music tracks and sound effects, which are used to complement images and footage. It also provides 3 dimensional models consisting of 3D models used in various industries, such as advertising, media and video production, gaming, retail, education, design, and architecture; and generative AI content comprising images generated from algorithms trained with ethically sourced content. The company offers its services under the Shutterstock, Pond5, TurboSquid, PicMonkey, PremiumBeat, Splash News, Bigstock, and Offset brand names. In addition, it operates a collection of graphics interchange format visuals and stickers that supplies casual conversational content. The company serves corporate professionals and organizations, media and broadcast companies, and small and medium-sized businesses, and individual creators through digital, live sales, and client management channels. Shutterstock, Inc. was founded in 2003 and is headquartered in New York, New York.

About Meta Platforms

Meta Platforms, Inc. engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately. The Reality Labs segment provides augmented and virtual reality related products comprising consumer hardware, software, and content that help people feel connected, anytime, and anywhere. The company was formerly known as Facebook, Inc. and changed its name to Meta Platforms, Inc. in October 2021. The company was incorporated in 2004 and is headquartered in Menlo Park, California