Head to Head Review: Paycom Software (NYSE:PAYC) & Digerati Technologies (OTCMKTS:DTGI)

Paycom Software (NYSE:PAYC) and Digerati Technologies (OTCMKTS:DTGI) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Risk and Volatility

Paycom Software has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500. Comparatively, Digerati Technologies has a beta of -0.06, suggesting that its stock price is 106% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Paycom Software and Digerati Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paycom Software	1	11	4	1	2.29
Digerati Technologies	0	0	0	0	0.00

Paycom Software currently has a consensus target price of $209.64, suggesting a potential upside of 47.09%. Given Paycom Software’s stronger consensus rating and higher probable upside, equities analysts plainly believe Paycom Software is more favorable than Digerati Technologies.

Profitability

This table compares Paycom Software and Digerati Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paycom Software	22.65%	24.79%	9.02%
Digerati Technologies	11.49%	N/A	N/A

Insider & Institutional Ownership

87.8% of Paycom Software shares are owned by institutional investors. 10.9% of Paycom Software shares are owned by insiders. Comparatively, 25.6% of Digerati Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Paycom Software and Digerati Technologies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paycom Software	$1.88 billion	4.26	$502.00 million	$8.04	17.73
Digerati Technologies	$22.76 million	0.15	-$810,000.00	$0.02	0.73

Paycom Software has higher revenue and earnings than Digerati Technologies. Digerati Technologies is trading at a lower price-to-earnings ratio than Paycom Software, indicating that it is currently the more affordable of the two stocks.

Summary

Paycom Software beats Digerati Technologies on 14 of the 15 factors compared between the two stocks.

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 Digerati Technologies

Digerati Technologies, Inc., through its subsidiaries, provides a portfolio of Internet-based telephony products and services through its cloud application platform and session-based communication network in the United States. The company offers Internet broadband, fiber, mobile broadband, and cloud wide area network (WAN) or software-defined wide area network (SD-WAN) solutions; cloud communication services, including fully hosted IP/PBX, video conferencing, mobile applications, Voice over Internet Protocol (VoIP) transport, session initiation protocol (SIP) trunking, call center applications, auto attendant, voice and web conferencing, call recording, messaging, voicemail to email conversion, integrated mobility applications, and customized VoIP services; and remote network monitoring, data backup, and disaster recovery services, as well as enterprise-class data and connectivity solutions, such as cloud WAN or SD-WAN, fiber, mobile broadband, and Ethernet over copper services. It primarily serves small to medium-sized enterprise customers through distributors and value-added resellers. The company was formerly known as ATSI Communications Inc. and changed its name to Digerati Technologies, Inc. in March 2011. Digerati Technologies, Inc. was founded in 1993 and is headquartered in San Antonio, Texas.