Open Text (NASDAQ:OTEX) vs. Intuit (NASDAQ:INTU) Critical Survey

Open Text (NASDAQ:OTEX) and Intuit (NASDAQ:INTU) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.

Dividends

Open Text pays an annual dividend of $1.10 per share and has a dividend yield of 5.0%. Intuit pays an annual dividend of $4.80 per share and has a dividend yield of 1.3%. Open Text pays out 64.7% of its earnings in the form of a dividend. Intuit pays out 31.1% 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. Intuit has raised its dividend for 13 consecutive years.

Volatility and Risk

Open Text has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Intuit has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Insider and Institutional Ownership

70.4% of Open Text shares are held by institutional investors. Comparatively, 83.7% of Intuit shares are held by institutional investors. 10.6% of Open Text shares are held by company insiders. Comparatively, 2.5% of Intuit shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Open Text and Intuit’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%
Intuit	21.57%	24.23%	13.44%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Open Text and Intuit, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Open Text	0	11	3	0	2.21
Intuit	0	6	25	1	2.84

Open Text currently has a consensus price target of $35.75, indicating a potential upside of 62.06%. Intuit has a consensus price target of $638.06, indicating a potential upside of 72.71%. Given Intuit’s stronger consensus rating and higher possible upside, analysts clearly believe Intuit is more favorable than Open Text.

Earnings and Valuation

This table compares Open Text and Intuit”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Open Text	$5.17 billion	1.05	$435.87 million	$1.70	12.98
Intuit	$18.83 billion	5.43	$3.87 billion	$15.44	23.93

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

Summary

Intuit 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 Intuit

Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in four segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax. The Small Business & Self-Employed segment provides QuickBooks services, that includes financial and business management online services and desktop software, payroll solutions, time tracking, merchant payment processing solutions, and financing for small businesses; and Mailchimp services, such as e-commerce, marketing automation, and customer relationship management. This segment also offers QuickBooks online services and desktop software solutions comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; and QuickBooks Self-Employed solution; payment-processing solutions, including credit and debit cards, Apple Pay, and ACH payment services; and financial supplies and financing for small businesses, as well as electronic filing of federal and state income tax returns. The Consumer segment provides TurboTax income tax preparation products and services. The Credit Karma segment offers consumers with a personal finance platform that provides personalized recommendations of home, auto, and personal loans, as well as credit cards and insurance products. The ProTax segment provides Lacerte, ProSeries, and ProFile desktop tax-preparation software products; and ProConnect Tax Online tax products, electronic tax filing service, and bank products and related services. It sells products and services through various sales and distribution channels, including multi-channel shop-and-buy experiences, websites and call centers, mobile application stores, and retail and other channels. The company was founded in 1983 and is headquartered in Mountain View, California.