Head to Head Analysis: Trend Micro (OTCMKTS:TMICY) versus Open Text (NASDAQ:OTEX)

Open Text (NASDAQ:OTEX) and Trend Micro (OTCMKTS:TMICY) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.

Valuation & Earnings

This table compares Open Text and Trend Micro”s gross 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	1.20	$435.87 million	$1.70	14.57
Trend Micro	$1.85 billion	2.59	$230.92 million	$1.75	19.38

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

Profitability

This table compares Open Text and Trend Micro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Open Text	8.42%	23.60%	6.94%
Trend Micro	12.51%	29.70%	9.09%

Risk & Volatility

Open Text has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Trend Micro has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Insider and Institutional Ownership

70.4% of Open Text shares are held by institutional investors. Comparatively, 0.1% of Trend Micro shares are held by institutional investors. 10.6% of Open Text shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds 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 4.4%. Trend Micro pays an annual dividend of $0.95 per share and has a dividend yield of 2.8%. Open Text pays out 64.7% of its earnings in the form of a dividend. Trend Micro pays out 54.3% 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Open Text and Trend Micro, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Open Text	0	11	3	0	2.21
Trend Micro	0	0	0	0	0.00

Open Text presently has a consensus target price of $35.75, suggesting a potential upside of 44.33%. Given Open Text’s stronger consensus rating and higher probable upside, equities analysts clearly believe Open Text is more favorable than Trend Micro.

Summary

Open Text beats Trend Micro on 9 of the 16 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 Trend Micro

Trend Micro Incorporated develops and sells security-related software for computers and related services in Japan and internationally. The company offers platforms, such as vision one platform, attack surface management, extended detection and response (XDR), cloud security, endpoint security, network security, email security, OT/ICS security, and threat intelligence. It also provides services packages, managed XDR, incident response, and support services. Additionally, the company serves 5G networks, healthcare, manufacturing, oil and gas, electric utility, and automotive industries. The company was incorporated in 1965 and is headquartered in Tokyo, Japan.