Jack Henry & Associates (NASDAQ:JKHY) vs. Equitable (NYSE:EQH) Critical Survey

Equitable (NYSE:EQH) and Jack Henry & Associates (NASDAQ:JKHY) are both large-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for Equitable and Jack Henry & Associates, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equitable	0	3	11	1	2.87
Jack Henry & Associates	0	5	12	1	2.78

Equitable presently has a consensus target price of $63.33, indicating a potential upside of 20.17%. Jack Henry & Associates has a consensus target price of $193.18, indicating a potential upside of 11.51%. Given Equitable’s stronger consensus rating and higher possible upside, analysts clearly believe Equitable is more favorable than Jack Henry & Associates.

Dividends

Equitable pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Jack Henry & Associates pays an annual dividend of $2.44 per share and has a dividend yield of 1.4%. Equitable pays out 23.0% of its earnings in the form of a dividend. Jack Henry & Associates pays out 33.5% 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. Equitable has raised its dividend for 2 consecutive years and Jack Henry & Associates has raised its dividend for 35 consecutive years. Equitable is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Equitable and Jack Henry & Associates”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equitable	$11.66 billion	1.23	-$1.38 billion	$5.21	10.12
Jack Henry & Associates	$2.54 billion	4.77	$502.78 million	$7.28	23.80

Jack Henry & Associates has lower revenue, but higher earnings than Equitable. Equitable is trading at a lower price-to-earnings ratio than Jack Henry & Associates, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Equitable has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Jack Henry & Associates has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Institutional and Insider Ownership

92.7% of Equitable shares are held by institutional investors. Comparatively, 98.8% of Jack Henry & Associates shares are held by institutional investors. 1.0% of Equitable shares are held by insiders. Comparatively, 0.4% of Jack Henry & Associates shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Equitable and Jack Henry & Associates’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equitable	11.53%	-3,089.96%	0.64%
Jack Henry & Associates	19.96%	24.46%	16.68%

Summary

Jack Henry & Associates beats Equitable on 10 of the 17 factors compared between the two stocks.

About Equitable

Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.