Intuit (NASDAQ:INTU) and SS&C Technologies (NASDAQ:SSNC) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.
Dividends
Intuit pays an annual dividend of $2.36 per share and has a dividend yield of 0.4%. SS&C Technologies pays an annual dividend of $0.64 per share and has a dividend yield of 0.8%. Intuit pays out 36.0% of its earnings in the form of a dividend. SS&C Technologies pays out 15.8% 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 raised its dividend for 9 consecutive years and SS&C Technologies has raised its dividend for 4 consecutive years. SS&C Technologies is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Intuit and SS&C Technologies' 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 | 19.09 | $1.83 billion | $6.56 | 81.79 |
| SS&C Technologies | $4.67 billion | 4.19 | $625.20 million | $4.04 | 18.91 |
Intuit has higher revenue and earnings than SS&C Technologies. SS&C Technologies is trading at a lower price-to-earnings ratio than Intuit, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and target prices for Intuit and SS&C Technologies, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Intuit | 0 | 5 | 18 | 0 | 2.78 |
| SS&C Technologies | 0 | 5 | 7 | 1 | 2.69 |
Intuit presently has a consensus target price of $467.6818, indicating a potential downside of 12.70%. SS&C Technologies has a consensus target price of $83.50, indicating a potential upside of 8.99%. Given SS&C Technologies' higher probable upside, analysts clearly believe SS&C Technologies is more favorable than Intuit.
Institutional & Insider Ownership
83.7% of Intuit shares are held by institutional investors. Comparatively, 80.4% of SS&C Technologies shares are held by institutional investors. 3.4% of Intuit shares are held by company insiders. Comparatively, 14.8% of SS&C Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Intuit and SS&C Technologies' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Intuit | 23.93% | 28.76% | 16.46% |
| SS&C Technologies | 14.87% | 20.83% | 7.29% |
Risk and Volatility
Intuit has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, SS&C Technologies has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.
Summary
Intuit beats SS&C Technologies on 12 of the 18 factors compared between the two stocks.
