Head-To-Head Survey: Paycom Software (NYSE:PAYC) & Docusign (NASDAQ:DOCU)

Paycom Software (NYSE:PAYC) and Docusign (NASDAQ:DOCU) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and price targets for Paycom Software and Docusign, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paycom Software	0	11	1	0	2.08
Docusign	0	12	4	0	2.25

Paycom Software currently has a consensus target price of $234.3636, indicating a potential upside of 8.02%. Docusign has a consensus target price of $89.7692, indicating a potential upside of 26.61%. Given Docusign’s stronger consensus rating and higher probable upside, analysts plainly believe Docusign is more favorable than Paycom Software.

Valuation & Earnings

This table compares Paycom Software and Docusign”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paycom Software	$1.88 billion	6.67	$502.00 million	$7.39	29.36
Docusign	$2.98 billion	4.81	$1.07 billion	$5.29	13.40

Docusign has higher revenue and earnings than Paycom Software. Docusign 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 Paycom Software and Docusign’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paycom Software	21.22%	25.40%	9.28%
Docusign	36.50%	14.27%	7.34%

Risk & Volatility

Paycom Software has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Docusign has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Insider and Institutional Ownership

87.8% of Paycom Software shares are owned by institutional investors. Comparatively, 77.6% of Docusign shares are owned by institutional investors. 10.9% of Paycom Software shares are owned by insiders. Comparatively, 1.7% of Docusign shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

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.

About Docusign

DocuSign, Inc. provides electronic signature solution in the United States and internationally. The company provides e-signature solution that enables sending and signing of agreements on various devices; Contract Lifecycle Management (CLM), which automates workflows across the entire agreement process; Document Generation streamlines the process of generating new, custom agreements; and Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce. It also provides Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Monitor that uses advanced analytics to track DocuSign eSignature web, mobile, and API account; Notary which enables notaries public to conduct remote online notarization transactions; and Web Forms, a web forms that quickly draft agreements using pre-populated data from completed forms or external systems via APIs. In addition, the company offers Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally. Signature and CLM are FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct and partner-assisted sales, and digital self-service purchasing. DocuSign, Inc. was incorporated in 2003 and is headquartered in San Francisco, California.