Head to Head Comparison: Paycom Software (NYSE:PAYC) versus Blackbaud (NASDAQ:BLKB)

Blackbaud (NASDAQ:BLKB) and Paycom Software (NYSE:PAYC) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Earnings & Valuation

This table compares Blackbaud and Paycom Software”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackbaud	$1.13 billion	1.72	$114.97 million	$3.20	13.39
Paycom Software	$2.05 billion	4.97	$453.40 million	$9.41	24.05

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

Profitability

This table compares Blackbaud and Paycom Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackbaud	13.12%	197.49%	6.33%
Paycom Software	22.78%	37.06%	8.17%

Insider and Institutional Ownership

94.2% of Blackbaud shares are owned by institutional investors. Comparatively, 87.8% of Paycom Software shares are owned by institutional investors. 2.0% of Blackbaud shares are owned by insiders. Comparatively, 13.2% of Paycom Software shares are owned by 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 Recommendations

This is a breakdown of recent ratings for Blackbaud and Paycom Software, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackbaud	1	2	2	0	2.20
Paycom Software	0	9	5	1	2.47

Blackbaud currently has a consensus target price of $49.50, indicating a potential upside of 15.52%. Paycom Software has a consensus target price of $214.23, indicating a potential downside of 5.34%. Given Blackbaud’s higher probable upside, equities analysts plainly believe Blackbaud is more favorable than Paycom Software.

Volatility and Risk

Blackbaud has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Paycom Software has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Summary

Paycom Software beats Blackbaud on 11 of the 15 factors compared between the two stocks.

About Blackbaud

Blackbaud, Inc. provides cloud software solutions to nonprofits, foundations, education institutions, and healthcare organizations in the United States and internationally. The company offers fundraising and engagement solutions, such as Blackbaud Raiser's Edge NXT, Blackbaud CRM, Blackbaud eTapestry, Blackbaud Luminate Online, Blackbaud TeamRaiser, JustGiving, Blackbaud Fundraiser Performance Management, Blackbaud Guided Fundraising, and Blackbaud Altru; and financial management solutions comprising Blackbaud Financial Edge NXT, Blackbaud Tuition Management, and Blackbaud Financial Aid and Billing Management. It also provides grant and award management solutions, consisting of Blackbaud Grantmaking and Blackbaud Award Management; education solutions, such as Blackbaud Student Information System, Blackbaud Learning Management System, Blackbaud Enrollment Management System, and Blackbaud School Website System; social responsibility solutions, which includes YourCause GrantsConnect and YourCause CSRconnect, and EVERFI; Blackbaud Merchant Services and Blackbaud Purchase Cards payment services; and Blackbaud's Intelligence for Good solutions, as well as Data Health, Insights, and Performance solutions and services. The company sells its solutions and related services through its direct sales force. Blackbaud, Inc. was founded in 1981 and is headquartered in Charleston, South Carolina.

About Paycom Software

Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. It offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution provides a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling, time-off requests, labor allocation, labor management reports/push reporting, geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, payroll card, Everyday, Paycom pay, Client Action Center, expense management, mileage tracker/fixed and variable rates, garnishment administration, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning, as well as my analytics. In addition, its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; benefit enrollment service; COBRA administration; personnel action and performance discussion forms; surveys; 401(k) reporting; report center; and affordable care act applications, as well as Clue, which securely collects, tracks, and manages the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is based in Oklahoma City, Oklahoma.