Shutterstock (NYSE:SSTK) and Pegasystems (NASDAQ:PEGA) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.
Institutional and Insider Ownership
64.1% of Shutterstock shares are owned by institutional investors. Comparatively, 47.9% of Pegasystems shares are owned by institutional investors. 46.8% of Shutterstock shares are owned by insiders. Comparatively, 51.9% of Pegasystems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Dividends
Shutterstock pays an annual dividend of $0.84 per share and has a dividend yield of 1.0%. Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Shutterstock pays out 113.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pegasystems pays out -9.6% of its earnings in the form of a dividend. Shutterstock has raised its dividend for 1 consecutive years and Pegasystems has raised its dividend for 1 consecutive years.
Risk and Volatility
Shutterstock has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Profitability
This table compares Shutterstock and Pegasystems' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Shutterstock | 7.70% | 15.13% | 8.21% |
| Pegasystems | -6.48% | -19.29% | -7.77% |
Valuation and Earnings
This table compares Shutterstock and Pegasystems' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Shutterstock | $650.52 million | 4.77 | $20.11 million | $0.74 | 114.74 |
| Pegasystems | $911.38 million | 10.72 | $-90,430,000.00 | ($1.25) | -96.18 |
Shutterstock has higher earnings, but lower revenue than Pegasystems. Pegasystems is trading at a lower price-to-earnings ratio than Shutterstock, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations for Shutterstock and Pegasystems, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Shutterstock | 0 | 0 | 5 | 0 | 3.00 |
| Pegasystems | 0 | 1 | 12 | 0 | 2.92 |
Shutterstock currently has a consensus target price of $94.50, suggesting a potential upside of 11.29%. Pegasystems has a consensus target price of $150.7692, suggesting a potential upside of 25.41%. Given Pegasystems' higher possible upside, analysts clearly believe Pegasystems is more favorable than Shutterstock.
Summary
Shutterstock beats Pegasystems on 9 of the 16 factors compared between the two stocks.
