Critical Review: Science Applications International (NASDAQ:SAIC) versus Gartner (NYSE:IT)

Science Applications International (NASDAQ:SAIC) and Gartner (NYSE:IT) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Institutional and Insider Ownership

76.0% of Science Applications International shares are owned by institutional investors. Comparatively, 91.5% of Gartner shares are owned by institutional investors. 0.7% of Science Applications International shares are owned by company insiders. Comparatively, 2.6% of Gartner shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Science Applications International has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Gartner has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares Science Applications International and Gartner’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Science Applications International	5.13%	34.68%	9.45%
Gartner	11.99%	525.46%	13.45%

Earnings and Valuation

This table compares Science Applications International and Gartner”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Science Applications International	$7.26 billion	0.74	$358.00 million	$8.55	15.00
Gartner	$6.50 billion	1.80	$729.23 million	$11.15	16.63

Gartner has lower revenue, but higher earnings than Science Applications International. Science Applications International is trading at a lower price-to-earnings ratio than Gartner, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Science Applications International and Gartner, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Science Applications International	1	8	2	0	2.09
Gartner	2	6	2	1	2.18

Science Applications International presently has a consensus price target of $125.22, indicating a potential downside of 2.33%. Gartner has a consensus price target of $187.30, indicating a potential upside of 1.04%. Given Gartner’s stronger consensus rating and higher possible upside, analysts plainly believe Gartner is more favorable than Science Applications International.

Summary

Gartner beats Science Applications International on 13 of the 14 factors compared between the two stocks.

About Science Applications International

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company’s offerings include engineering; technology integration; IT modernization; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services; and end-to-end services, such as design, development, integration, deployment, management and operations, sustainment, and security of its customers’ IT infrastructure, as well as cloud migration, managed services, infrastructure modernization, and enterprise IT-as-a-service solutions. It serves the U.S. military comprising Army, Air Force, Navy, Marines, and Coast Guard; Department of Defense agencies; National Aeronautics and Space Administration; the U.S. Department of State; Department of Justice; Department of Homeland Security; and various intelligence community agencies, as well as U.S. federal civilian agencies. The company was formerly known as SAIC Gemini, Inc. and changed its name to Science Applications International Corporation in September 2013. Science Applications International Corporation was founded in 1969 and is headquartered in Reston, Virginia.

About Gartner

Gartner, Inc. operates as a research and advisory company in the United States, Canada, Europe, the Middle East, Africa, and internationally. It operates through three segments: Research, Conferences, and Consulting. The Research segment delivers its research primarily through a subscription service that include on-demand access to published research content, data and benchmarks, and direct access to a network of research experts. The Conferences segment offers executives and teams in an organization the opportunity to learn, share, and network. The Consulting segment offers market-leading research, custom analysis, and on-the-ground support services. This segment also offers actionable solutions for IT-related priorities, including IT cost optimization, digital transformation, and IT sourcing optimization. Gartner, Inc. was founded in 1979 and is headquartered in Stamford, Connecticut.