Analyzing FactSet Research Systems (NYSE:FDS) and Equifax (EFX)
Equifax (NYSE: EFX) and FactSet Research Systems (NYSE:FDS) are both mid-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.
Valuation and Earnings
This table compares Equifax and FactSet Research Systems’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Equifax||$3.29 billion||4.01||$1.22 billion||$4.72||23.20|
|FactSet Research Systems||$1.18 billion||5.90||$414.14 million||$6.52||27.21|
Equifax has higher revenue and earnings than FactSet Research Systems. Equifax 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.
Volatility & Risk
Equifax has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, FactSet Research Systems has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Equifax pays an annual dividend of $1.56 per share and has a dividend yield of 1.4%. FactSet Research Systems pays an annual dividend of $2.24 per share and has a dividend yield of 1.3%. Equifax pays out 33.1% of its earnings in the form of a dividend. FactSet Research Systems pays out 34.4% 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. Equifax has increased its dividend for 11 consecutive years and FactSet Research Systems has increased its dividend for 5 consecutive years. Equifax is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Equifax and FactSet Research Systems’ 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%|
This is a summary of current ratings and price targets for Equifax and FactSet Research Systems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|FactSet Research Systems||2||5||2||0||2.00|
Equifax currently has a consensus price target of $130.27, suggesting a potential upside of 18.96%. FactSet Research Systems has a consensus price target of $171.56, suggesting a potential downside of 3.30%. Given Equifax’s stronger consensus rating and higher probable upside, equities analysts clearly believe Equifax is more favorable than FactSet Research Systems.
Institutional and Insider Ownership
90.0% of Equifax shares are owned by institutional investors. Comparatively, 93.7% of FactSet Research Systems shares are owned by institutional investors. 1.3% of Equifax shares are owned by company insiders. Comparatively, 2.7% of FactSet Research Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
FactSet Research Systems beats Equifax on 9 of the 17 factors compared between the two stocks.
Equifax Company Profile
Equifax Inc. is a global provider of information solutions and human resources business process outsourcing services for businesses, governments and consumers. The Company operates in four segments: U.S. Information Solutions (USIS), International, Workforce Solutions and Global Consumer Solutions. Its products and services are based on databases of consumer and business information derived from various sources, including credit, financial assets, telecommunications and utility payments, employment, income, demographic and marketing data. It uses statistical techniques and software tools to analyze all available data, creating customized insights, decision-making solutions and processing services for its clients. It helps consumers understand, manage and protect their personal information and make more informed financial decisions. The Company also provides information, technology and services to support debt collections and recovery management.
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.
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