FactSet Research Systems (NYSE: FDS) and S&P Global (NYSE:SPGI) are both mid-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.
Institutional and Insider Ownership
93.7% of FactSet Research Systems shares are held by institutional investors. Comparatively, 85.2% of S&P Global shares are held by institutional investors. 2.7% of FactSet Research Systems shares are held by company insiders. Comparatively, 0.2% of S&P Global shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares FactSet Research Systems and S&P Global’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|FactSet Research Systems||21.15%||55.76%||23.74%|
FactSet Research Systems pays an annual dividend of $2.24 per share and has a dividend yield of 1.3%. S&P Global pays an annual dividend of $1.64 per share and has a dividend yield of 1.0%. FactSet Research Systems pays out 34.4% of its earnings in the form of a dividend. S&P Global pays out 19.2% 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. FactSet Research Systems has raised its dividend for 11 consecutive years. FactSet Research Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
FactSet Research Systems has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, S&P Global has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for FactSet Research Systems and S&P Global, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|FactSet Research Systems||2||5||2||0||2.00|
FactSet Research Systems currently has a consensus target price of $171.56, indicating a potential downside of 3.49%. S&P Global has a consensus target price of $156.25, indicating a potential downside of 3.82%. Given FactSet Research Systems’ higher possible upside, equities analysts plainly believe FactSet Research Systems is more favorable than S&P Global.
Valuation & Earnings
This table compares FactSet Research Systems and S&P Global’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|FactSet Research Systems||$1.18 billion||5.91||$414.14 million||$6.52||27.26|
|S&P Global||$5.80 billion||7.20||$2.66 billion||$8.56||18.98|
S&P Global has higher revenue and earnings than FactSet Research Systems. S&P Global is trading at a lower price-to-earnings ratio than FactSet Research Systems, indicating that it is currently the more affordable of the two stocks.
S&P Global beats FactSet Research Systems on 11 of the 17 factors compared between the two stocks.
FactSet Research Systems Company Profile
Factset Research Systems Inc. is engaged in providing integrated financial information and big data analytical applications for the global investment community. The Company’s segments include the U.S., Europe and Asia Pacific. The U.S. segment services finance professionals, including financial institutions throughout the Americas. The European segment maintains offices in France, Germany, Italy, Ireland, Latvia, Luxembourg, the Netherlands, Spain, South Africa, Sweden and Dubai. The Asia Pacific segment maintains office locations in Australia, Hong Kong, Singapore and Mumbai, India. The Company delivers insight and information to investment professionals through its analytics, service, content, and technology. Its offerings include a complete services solution focused on verifying, cleaning and loading portfolio data across asset classes, and an execution management system. The Company offers third-party content through desktop, wireless and off-platform solutions.
S&P Global Company Profile
S&P Global Inc., formerly McGraw Hill Financial Inc., is a provider of ratings, benchmarks, analytics and data to the capital and commodity markets around the world. The Company operates through three segments: Ratings, which provides credit ratings, research and analytics to investors, issuers and other market participants; Market and Commodities Intelligence, which offers multi-asset-class data, research and analytical capabilities that integrate cross-asset analytics and desktop services, and deliver their customers in the commodity and energy markets access to information, data, analytic services and pricing and benchmarks, and S&P Dow Jones Indices (Indices), which is an index provider that maintains a range of valuation and index benchmarks for investment advisors, wealth managers and institutional investors. The Company’s subsidiary, CRISIL Limited (CRISIL), is a global analytical company and a provider of ratings, data and research, analytics and solutions.
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