Head to Head Contrast: Dolby Laboratories (NYSE:DLB) vs. Q2 (NYSE:QTWO)

Q2 (NYSE:QTWO) and Dolby Laboratories (NYSE:DLB) are both mid-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.

Insider & Institutional Ownership

58.6% of Dolby Laboratories shares are held by institutional investors. 0.9% of Q2 shares are held by insiders. Comparatively, 37.9% of Dolby Laboratories shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Q2 and Dolby Laboratories”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Q2	$794.81 million	4.78	$52.01 million	$1.40	43.51
Dolby Laboratories	$1.35 billion	4.48	$255.02 million	$2.35	27.46

Dolby Laboratories has higher revenue and earnings than Q2. Dolby Laboratories is trading at a lower price-to-earnings ratio than Q2, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Q2 has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, Dolby Laboratories has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Q2 and Dolby Laboratories, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Q2	0	3	8	2	2.92
Dolby Laboratories	0	1	2	0	2.67

Q2 presently has a consensus target price of $76.17, suggesting a potential upside of 25.04%. Dolby Laboratories has a consensus target price of $87.50, suggesting a potential upside of 35.61%. Given Dolby Laboratories’ higher probable upside, analysts clearly believe Dolby Laboratories is more favorable than Q2.

Profitability

This table compares Q2 and Dolby Laboratories’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Q2	10.87%	17.04%	8.80%
Dolby Laboratories	16.70%	11.08%	9.04%

Summary

Dolby Laboratories beats Q2 on 8 of the 15 factors compared between the two stocks.

About Q2

Q2 Holdings, Inc. provides cloud-based digital solutions to regional and community financial institutions in the United States. The company offers Digital Banking Platform, an end-to-end digital banking platform supports its financial institution customers in their delivery of unified digital banking services across digital channels. Its digital banking platform solutions, comprising Q2 Consumer Banking, Q2 Small Business and Commercial, Q2mobile Remote Deposit Capture, Q2 Sentinel, Q2 Patrol, Q2 SMART, Q2 Contextual Personal Financial Management, Q2 Goals, Q2 CardSwap, Q2 Gro, Q2 Innovation Studio, Q2 Biller Direct, ClickSWITCH, Sensibill, Centrix Dispute Tracking System, Centrix Payments I.Q. System, and Centrix Exact/Transaction Management System. The company also provides lending solutions, which consists precisionlender solutions, a cloud-based platform, data-driven sales enablement, relationship pricing, and portfolio management solution includes precisionlender platform, premium treasury pricing, data studio, and Andi; and Q2 Cloud Lending solutions, a cloud-based digital lending platform and end-to-end lending solution that allows financial institutions, FinTechs, and Alt-FIs to automate and digitize their lending activities, supporting digital lending applications, scoring, underwriting, servicing, and collections for multiple assets classes comprising Q2 CL portal, originate, loan, marketplace, and collections. In addition, it offers Q2 Innovation Studio, an application program interface, or API, based and software development kit, or SDK, based open technology platform; and Helix, a cloud-native, real-time core processing platform. The company was formerly known as CBG Holdings, Inc. and changed its name to Q2 Holdings, Inc. in March 2013. Q2 Holdings, Inc. was founded in 2004 and is headquartered in Austin, Texas.

About Dolby Laboratories

Dolby Laboratories, Inc. creates audio and imaging technologies that transform entertainment at the cinema, DTV transmissions and devices, mobile devices, OTT video and music services, home entertainment devices, and automobiles. The company develops and licenses its audio technologies, such as AAC & HE-AAC, a digital audio codec solution used for a range of media applications; AVC, a digital video codec with high bandwidth efficiency used in various media devices; Dolby AC-4, a digital audio coding technology that delivers new audio experiences to a range of playback devices; and Dolby Atmos technology for cinema and various media devices. Its audio technologies also include DD, a digital audio coding technology that provides multichannel sound to applications; DD+, a digital audio coding technology that offers audio transmission for a range of media applications and devices; Dolby TrueHD, a digital audio coding technology providing encoding for media application; Dolby Vision, an imaging technology for cinema and media devices; and HEVC, a digital video codec with high bandwidth efficiency for media devices. In addition, the company offers digital cinema servers, cinema processors, amplifiers, loudspeakers, and audio and imaging hardware and software products for the cinema, television, broadcast, communication, and entertainment industries. Further, it provides 3-D glasses and kits; and various services to support theatrical and television production for cinema exhibition, broadcast, and home entertainment. The company serves film studios, content creators, post-production facilities, cinema operators, broadcasters, and video game designers. It sells its products directly to the end users, as well as through dealers and distributors worldwide. Dolby Laboratories, Inc. was founded in 1965 and is headquartered in San Francisco, California.