Critical Review: ACI Worldwide (NASDAQ:ACIW) and SS&C Technologies (NASDAQ:SSNC)

SS&C Technologies (NASDAQ:SSNC) and ACI Worldwide (NASDAQ:ACIW) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Institutional & Insider Ownership

96.9% of SS&C Technologies shares are held by institutional investors. Comparatively, 94.7% of ACI Worldwide shares are held by institutional investors. 16.4% of SS&C Technologies shares are held by company insiders. Comparatively, 1.1% of ACI Worldwide shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares SS&C Technologies and ACI Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SS&C Technologies	13.86%	19.80%	6.98%
ACI Worldwide	15.07%	18.97%	8.75%

Risk and Volatility

SS&C Technologies has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, ACI Worldwide has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for SS&C Technologies and ACI Worldwide, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SS&C Technologies	0	2	6	1	2.89
ACI Worldwide	0	2	3	0	2.60

SS&C Technologies currently has a consensus price target of $101.75, indicating a potential upside of 15.95%. ACI Worldwide has a consensus price target of $60.00, indicating a potential upside of 24.64%. Given ACI Worldwide’s higher possible upside, analysts clearly believe ACI Worldwide is more favorable than SS&C Technologies.

Earnings & Valuation

This table compares SS&C Technologies and ACI Worldwide”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SS&C Technologies	$5.88 billion	3.64	$760.50 million	$3.37	26.04
ACI Worldwide	$1.59 billion	3.11	$203.12 million	$2.48	19.41

SS&C Technologies has higher revenue and earnings than ACI Worldwide. ACI Worldwide 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.

Summary

SS&C Technologies beats ACI Worldwide on 12 of the 15 factors compared between the two stocks.

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.

About ACI Worldwide

ACI Worldwide, Inc., a software company, develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments in the United States and internationally. The company operates in three segments: Banks, Merchants, and Billers. The company offers ACI Acquiring, a solution to process credit, debit, and prepaid card transactions, deliver digital innovation, and fraud prevention; ACI Issuing, a digital payment issuing solution for new payment offering; and ACI Enterprise Payments Platform that provides payment processing and orchestration capabilities for digital payments. It also provides ACI Low Value Real-Time Payments, a platform for processing real-time payments; and ACI High Value Real-Time Payments, a payments engine that offers multi-bank, multi-currency, 24×7 payment processing, and SWIFT messaging. In addition, the company offers ACI Payments Orchestration Platform for optimizing payments; omni-channel payment platform; ACI Fraud Management, a real-time approach to fraud management; and ACI Speedpay, an integrated suite of digital billing, payment, disbursement, and communication services. The company offers electronic bill presentment and payment services to consumer finance, insurance, healthcare, higher education, utility, government, telecommunications, and mortgage sectors; implementation services, include product installations and configurations, and custom software modifications; and business and technical consultancy, on-site support, product education, and testing services, as well as distributes or acts as a sales agent for software developed by third parties. It markets its products under the ACI Worldwide brand. The company was formerly known as Transaction Systems Architects, Inc. and changed its name to ACI Worldwide, Inc. in July 2007. The company was founded in 1975 and is based in Elkhorn, Nebraska.