Critical Survey: Jack Henry & Associates (NASDAQ:JKHY) & C3.ai (NYSE:AI)

Jack Henry & Associates (NASDAQ:JKHY) and C3.ai (NYSE:AI) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Risk and Volatility

Jack Henry & Associates has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, C3.ai has a beta of 1.96, suggesting that its share price is 96% more volatile than the S&P 500.

Valuation and Earnings

This table compares Jack Henry & Associates and C3.ai”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack Henry & Associates	$2.38 billion	4.72	$455.75 million	$6.24	24.70
C3.ai	$372.10 million	7.02	-$288.70 million	($2.60)	-7.29

Jack Henry & Associates has higher revenue and earnings than C3.ai. C3.ai is trading at a lower price-to-earnings ratio than Jack Henry & Associates, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

98.8% of Jack Henry & Associates shares are owned by institutional investors. Comparatively, 39.0% of C3.ai shares are owned by institutional investors. 0.6% of Jack Henry & Associates shares are owned by company insiders. Comparatively, 26.5% of C3.ai shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Jack Henry & Associates and C3.ai, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack Henry & Associates	1	8	2	0	2.09
C3.ai	5	7	1	1	1.86

Jack Henry & Associates currently has a consensus price target of $174.88, indicating a potential upside of 13.47%. C3.ai has a consensus price target of $22.09, indicating a potential upside of 16.57%. Given C3.ai’s higher possible upside, analysts plainly believe C3.ai is more favorable than Jack Henry & Associates.

Dividends

Jack Henry & Associates pays an annual dividend of $2.32 per share and has a dividend yield of 1.5%. C3.ai pays an annual dividend of $0.90 per share and has a dividend yield of 4.7%. Jack Henry & Associates pays out 37.2% of its earnings in the form of a dividend. C3.ai pays out -34.6% 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. Jack Henry & Associates has increased its dividend for 35 consecutive years. C3.ai is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Jack Henry & Associates and C3.ai’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack Henry & Associates	19.19%	22.60%	15.43%
C3.ai	-92.08%	-40.69%	-33.35%

Summary

Jack Henry & Associates beats C3.ai on 11 of the 18 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.

About C3.ai

C3.ai, Inc. operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company provides C3 AI platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications; C3 AI Ex Machina for analysis-ready data; C3 AI CRM, an industry specific customer relationship management solution; and C3 Generative AI Product Suite that enables to locate, retrieve, and present information. It also offers C3 AI applications, including C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels; C3 AI Supply Network Risk, which identifies emerging inbound and outbound risks across the network; C3 AI Sustainability Suite, which helps to decrease greenhouse gas emission; C3 AI Production Schedule Optimization, a solution for scheduling production; C3 AI Financial Services Suite, which helps to minimize compliance risks; and C3 AI Energy Management solution. In addition, it offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications market. It has strategic partnerships with Baker Hughes in the areas of oil and gas market; Booz Allen to provide solutions to government, defense, and intelligence sectors; Raytheon; and AWS, Google, and Microsoft. The company was formerly known as C3 IoT, Inc. and changed its name to C3.ai, Inc. in June 2019. C3.ai, Inc. was incorporated in 2009 and is headquartered in Redwood City, California.