Head to Head Review: Constellation Software (CNSWF) vs. Its Peers

Constellation Software (OTCMKTS:CNSWF) is one of 959 public companies in the “Software” industry, but how does it weigh in compared to its competitors? We will compare Constellation Software to related companies based on the strength of its earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Profitability

This table compares Constellation Software and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Constellation Software	7.29%	49.07%	13.29%
Constellation Software Competitors	-599.60%	26.31%	-8.93%

Analyst Recommendations

This is a breakdown of recent recommendations for Constellation Software and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Constellation Software	0	1	5	1	3.00
Constellation Software Competitors	5840	21623	45013	1501	2.57

As a group, “Software” companies have a potential upside of 28.32%. Given Constellation Software’s competitors higher probable upside, analysts clearly believe Constellation Software has less favorable growth aspects than its competitors.

Risk and Volatility

Constellation Software has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Constellation Software’s competitors have a beta of 1.35, suggesting that their average stock price is 35% more volatile than the S&P 500.

Institutional and Insider Ownership

41.5% of shares of all “Software” companies are held by institutional investors. 19.9% of shares of all “Software” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Constellation Software and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Constellation Software	$11.62 billion	$512.00 million	53.93
Constellation Software Competitors	$1.79 billion	$382.68 million	112.20

Constellation Software has higher revenue and earnings than its competitors. Constellation Software is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

Constellation Software pays an annual dividend of $4.00 per share and has a dividend yield of 0.2%. Constellation Software pays out 8.8% of its earnings in the form of a dividend. As a group, “Software” companies pay a dividend yield of 1.9% and pay out 48.0% of their earnings in the form of a dividend.

Summary

Constellation Software beats its competitors on 9 of the 15 factors compared.

About Constellation Software

Constellation Software Inc. is a Canadian software company that acquires, develops and operates businesses specializing in vertical market software—applications designed for the needs of particular industries or customer groups. Its products support specialized business processes across a range of markets. The company’s software businesses serve customers in both the public and private sectors, providing solutions such as operational and administrative software, along with related maintenance and support.