Comparing Open Text (NASDAQ:OTEX) & SS&C Technologies (NASDAQ:SSNC)

Open Text (NASDAQ:OTEX) and SS&C Technologies (NASDAQ:SSNC) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Insider & Institutional Ownership

70.4% of Open Text shares are owned by institutional investors. Comparatively, 97.0% of SS&C Technologies shares are owned by institutional investors. 10.6% of Open Text shares are owned by company insiders. Comparatively, 16.4% of SS&C Technologies shares are owned 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.

Dividends

Open Text pays an annual dividend of $1.10 per share and has a dividend yield of 3.1%. SS&C Technologies pays an annual dividend of $1.08 per share and has a dividend yield of 1.2%. Open Text pays out 66.7% of its earnings in the form of a dividend. SS&C Technologies pays out 33.9% 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. SS&C Technologies has increased its dividend for 9 consecutive years.

Profitability

This table compares Open Text and SS&C Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Open Text	8.43%	22.52%	6.72%
SS&C Technologies	13.34%	18.92%	6.74%

Valuation and Earnings

This table compares Open Text and SS&C Technologies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Open Text	$5.17 billion	1.76	$435.87 million	$1.65	21.62
SS&C Technologies	$5.88 billion	3.70	$760.50 million	$3.19	27.97

SS&C Technologies has higher revenue and earnings than Open Text. Open Text is trading at a lower price-to-earnings ratio than SS&C Technologies, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Open Text has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, SS&C Technologies has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Open Text and SS&C Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Open Text	1	7	2	0	2.10
SS&C Technologies	0	2	5	1	2.88

Open Text currently has a consensus price target of $33.10, indicating a potential downside of 7.23%. SS&C Technologies has a consensus price target of $97.38, indicating a potential upside of 9.15%. Given SS&C Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe SS&C Technologies is more favorable than Open Text.

Summary

SS&C Technologies beats Open Text on 16 of the 18 factors compared between the two stocks.

About Open Text

Open Text Corporation provides information management software and solutions. The company offers content services, which includes content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving; and operates experience cloud platform that provides customer experience and web content management, digital asset management, customer analytics, AI and insights, e-discovery, digital fax, omnichannel communications, secure messaging, and voice of customer, as well as customer journey, testing, and segmentation. It also provides cybersecurity cloud solutions to protect, prevent, detect, respond and quickly recover from threats across endpoints, network, applications, IT infrastructure and data, AI-led threat intelligence; and to protect critical information and processes through threat intelligence, forensics, identity, encryption, and cloud-based application security. In addition, the company offers business network cloud for digital supply chains and secure e-commerce ecosystems including digitize and automate procure-to-pay and order-to-cash processes; IT operations management cloud for automation and advancement of IT support and asset management; and analytics & AI cloud solutions that offers artificial intelligence with practical usage to provide organizations with actionable insights and better automation, such as visualizations, advanced natural language processing and understanding, and integrated computer vision capabilities. In addition, it provides application automation cloud, developers cloud, and services. Further, it has strategic partnerships with SAP SE, Google Cloud, Amazon AWS, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, DXC Technology Company, Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.

About SS&C Technologies

SS&C Technologies Holdings, Inc. engages in the development and provision of software solutions to the financial services and healthcare industries. It operates through the following geographical segments: United States, Europe, Middle East and Africa, Asia Pacific and Japan, Canada, and the Americas, excluding the United States and Canada. Its products include advent genesis, antares, asset allocators, AWD, axys, BANC mall, BRIX, DST vision, evare, lightning, and moxy. The company was founded by William Charles Stone in March 1986 and is headquartered in Windsor, CT.