IHS Markit (NASDAQ: INFO) and Bankrate (NYSE:RATE) are both business services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitabiliy, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Volatility and Risk

IHS Markit has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Bankrate has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500.

Profitability

This table compares IHS Markit and Bankrate’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IHS Markit 6.66% 7.33% 4.15%
Bankrate -8.64% 6.66% 4.19%

Insider & Institutional Ownership

97.9% of IHS Markit shares are held by institutional investors. Comparatively, 49.3% of Bankrate shares are held by institutional investors. 6.3% of Bankrate 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.

Earnings & Valuation

This table compares IHS Markit and Bankrate’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IHS Markit $3.35 billion 5.31 $973.60 million $0.52 85.54
Bankrate $459.34 million 2.69 $95.97 million ($0.46) -30.33

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for IHS Markit and Bankrate, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IHS Markit 1 5 8 0 2.50
Bankrate 0 4 3 0 2.43

IHS Markit presently has a consensus target price of $43.00, indicating a potential downside of 3.33%. Bankrate has a consensus target price of $12.71, indicating a potential downside of 8.86%. Given IHS Markit’s stronger consensus rating and higher possible upside, equities analysts clearly believe IHS Markit is more favorable than Bankrate.

Summary

IHS Markit beats Bankrate on 11 of the 14 factors compared between the two stocks.

About IHS Markit

IHS Markit Ltd., formerly Markit Ltd., is a provider of critical information and analytics for the major industries, financial markets and governments. The Company operates through four segments: Resources, Transportation, Consolidated Markets & Solutions (CMS) and Financial Services. The Resources segment includes its energy and chemicals product offerings. Its energy offerings are focused on upstream, midstream, downstream and power/gas/coal/renewables (PGCR) services. The Transportation segment includes its aerospace, defense and security (AD&S); automotive, and maritime and trade (M&T) product offerings. The CMS segment includes its product design; technology, media and telecommunication, and economics and country risk (ECR) product offerings. The Company’s Financial Services segment provides pricing and reference data, indices, valuation and trading services, trade processing, enterprise software and managed services.

About Bankrate

Bankrate, Inc. is a publisher, aggregator and distributor of personal finance content on the Internet. The Company provides consumers personal finance editorial content across multiple vertical categories, including mortgages, deposits, credit cards, senior care and other personal finance categories. The Company’s segments include Banking, Credit Cards, Senior Care and Other. The Company provides a range of digital display advertising formats. The Company is also engaged in the sale of print advertisements and the distribution (or syndication) of its editorial content. The Company offers branded content that educates consumers and financial professionals on a range of personal finance topics. The Company provides a platform for consumers searching for competitive rates on mortgages, deposits and money market accounts.

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