Intuit (NASDAQ:INTU) and Pegasystems (NASDAQ:PEGA) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.
Analyst Ratings
This is a summary of recent recommendations and price targets for Intuit and Pegasystems, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Intuit | 0 | 3 | 17 | 0 | 2.85 |
| Pegasystems | 0 | 1 | 12 | 0 | 2.92 |
Intuit currently has a consensus target price of $432.2727, suggesting a potential upside of 7.79%. Pegasystems has a consensus target price of $150.7692, suggesting a potential upside of 25.41%. Given Pegasystems' stronger consensus rating and higher probable upside, analysts plainly believe Pegasystems is more favorable than Intuit.
Profitability
This table compares Intuit and Pegasystems' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Intuit | 25.10% | 40.29% | 21.60% |
| Pegasystems | -6.48% | -19.29% | -7.77% |
Volatility and Risk
Intuit has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.
Dividends
Intuit pays an annual dividend of $2.36 per share and has a dividend yield of 0.6%. Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Intuit pays out 36.0% of its earnings in the form of a dividend. Pegasystems pays out -9.6% 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. Intuit has increased its dividend for 9 consecutive years and Pegasystems has increased its dividend for 1 consecutive years. Intuit is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
84.8% of Intuit shares are held by institutional investors. Comparatively, 47.9% of Pegasystems shares are held by institutional investors. 3.4% of Intuit shares are held by insiders. Comparatively, 51.9% of Pegasystems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Intuit and Pegasystems' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Intuit | $7.68 billion | 14.30 | $1.83 billion | $6.56 | 61.13 |
| Pegasystems | $911.38 million | 10.72 | $-90,430,000.00 | ($1.25) | -96.18 |
Intuit has higher revenue and earnings than Pegasystems. Pegasystems is trading at a lower price-to-earnings ratio than Intuit, indicating that it is currently the more affordable of the two stocks.
Summary
Intuit beats Pegasystems on 12 of the 17 factors compared between the two stocks.
