Critical Review: FactSet Research Systems (NYSE:FDS) and Singapore Exchange (OTCMKTS:SPXCF)

Singapore Exchange (OTCMKTS:SPXCF) and FactSet Research Systems (NYSE:FDS) are both financial services companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Dividends

Singapore Exchange pays an annual dividend of $0.28 per share and has a dividend yield of 3.5%. FactSet Research Systems pays an annual dividend of $4.16 per share and has a dividend yield of 1.0%. Singapore Exchange pays out 94.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FactSet Research Systems pays out 31.4% of its earnings in the form of a dividend. FactSet Research Systems has raised its dividend for 26 consecutive years.

Profitability

This table compares Singapore Exchange and FactSet Research Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Singapore Exchange	N/A	N/A	N/A
FactSet Research Systems	23.56%	34.48%	15.17%

Insider and Institutional Ownership

11.6% of Singapore Exchange shares are owned by institutional investors. Comparatively, 91.2% of FactSet Research Systems shares are owned by institutional investors. 1.0% of FactSet Research Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Singapore Exchange and FactSet Research Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Singapore Exchange	1	0	0	0	1.00
FactSet Research Systems	4	8	0	0	1.67

FactSet Research Systems has a consensus price target of $432.27, suggesting a potential upside of 5.32%. Given FactSet Research Systems’ stronger consensus rating and higher probable upside, analysts plainly believe FactSet Research Systems is more favorable than Singapore Exchange.

Earnings & Valuation

This table compares Singapore Exchange and FactSet Research Systems’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Singapore Exchange	N/A	N/A	N/A	$0.30	27.24
FactSet Research Systems	$2.18 billion	7.16	$468.17 million	$13.26	30.91

FactSet Research Systems has higher revenue and earnings than Singapore Exchange. Singapore Exchange is trading at a lower price-to-earnings ratio than FactSet Research Systems, indicating that it is currently the more affordable of the two stocks.

Summary

FactSet Research Systems beats Singapore Exchange on 12 of the 13 factors compared between the two stocks.

About Singapore Exchange

Singapore Exchange Limited, together with its subsidiaries, operates as an integrated securities and derivatives exchange, and related clearing houses in Singapore. It operates through Fixed Income, Currencies, and Commodities; Equities; and Data, Connectivity, and Indices segments. The Fixed Income, Currencies, and Commodities segment offers fixed income issuer, trading and clearing, and collateral management services. The Equities segment provides issuer, securities trading and clearing, securities settlement and depository management, derivatives trading and clearing, and collateral management services. The Data, Connectivity, and Indices segment offers market data, connectivity, and indices services. The company offers counterparty guarantee, and depository and related services for securities and derivatives transactions; bond trading services; front-line regulatory functions; and computer and software maintenance services. It also provides an electronic foreign exchange trading solutions and platform; electronic communication network; FX platform and support services; and management consultancy services for index activities. In addition, the company offers membership and management services to related corporations; distributes bulk freight market indices and information; and operates an electricity market, as well as provides administration services for index calculation, risk analyses, and financial research. Singapore Exchange Limited was incorporated in 1999 and is headquartered in Singapore.

About FactSet Research Systems

FactSet Research Systems Inc., a financial data company, provides integrated financial information and analytical applications to the investment community in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company delivers insight and information through the workflow solutions of research, analytics and trading, content and technology solutions, and wealth. It serves portfolio managers, investment banks, asset managers, wealth advisors, corporate clients, and other financial services entities. FactSet Research Systems Inc. was founded in 1978 and is headquartered in Norwalk, Connecticut.