Analyzing Bandwidth (NASDAQ:BAND) and IHS (NYSE:IHS)

Bandwidth (NASDAQ:BAND) and IHS (NYSE:IHS) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Institutional and Insider Ownership

68.5% of Bandwidth shares are owned by institutional investors. Comparatively, 17.5% of IHS shares are owned by institutional investors. 6.5% of Bandwidth shares are owned by insiders. Comparatively, 1.1% of IHS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Bandwidth and IHS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bandwidth	-1.71%	0.95%	0.35%
IHS	8.12%	-661.41%	12.24%

Risk and Volatility

Bandwidth has a beta of 2.03, meaning that its share price is 103% more volatile than the S&P 500. Comparatively, IHS has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Bandwidth and IHS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bandwidth	2	1	4	0	2.29
IHS	2	4	3	0	2.11

Bandwidth currently has a consensus target price of $20.60, indicating a potential upside of 14.06%. IHS has a consensus target price of $9.61, indicating a potential upside of 16.34%. Given IHS’s higher probable upside, analysts plainly believe IHS is more favorable than Bandwidth.

Earnings & Valuation

This table compares Bandwidth and IHS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bandwidth	$753.82 million	0.75	-$12.91 million	($0.43)	-42.00
IHS	$1.58 billion	1.75	$143.60 million	$0.41	20.14

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

Summary

IHS beats Bandwidth on 8 of the 14 factors compared between the two stocks.

About Bandwidth

Bandwidth is a leading enterprise cloud communications company. Companies like Cisco, Google, Microsoft, RingCentral, Uber, and Zoom use Bandwidth’s APIs to easily embed voice, messaging, and emergency services into software and applications. Bandwidth is the first and only CPaaS provider offering a robust selection of communications APIs built around their own IP voice network.

About IHS

IHS Inc. develops source of information, insight and analytics in different areas of business. The Company’s segments include Resources, Transportation and Consolidated Markets & Solutions. The Company’s Resources segment includes its Energy and Chemicals product offerings. Its Transportation segment includes its Automotive; Maritime & Trade, and Aerospace, Defense & Security product offerings. Its Consolidated Markets & Solutions segment includes its Product Design; Technology, Media & Telecom, and Economics & Country Risk product offerings. It provides authoritative analysis and forecasts of sales and production for light vehicles, medium and heavy commercial vehicles, powertrain, components and technology systems across various markets. Its product design offerings include content and analysis on various engineering and technical standards, codes, reference books, journals, and other scientific and technical documents, as well as software-based engineering decision engines.