QAD (QADA) versus Ebix (EBIX) Critical Contrast
QAD (NASDAQ: QADA) and Ebix (NASDAQ:EBIX) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitabiliy, analyst recommendations and dividends.
Valuation & Earnings
This table compares QAD and Ebix’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|QAD||$283.96 million||2.09||$10.09 million||($0.85)||-36.76|
|Ebix||$306.33 million||5.72||$111.26 million||$3.03||18.35|
Ebix has higher revenue and earnings than QAD. QAD is trading at a lower price-to-earnings ratio than Ebix, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
52.3% of QAD shares are owned by institutional investors. Comparatively, 64.1% of Ebix shares are owned by institutional investors. 44.1% of QAD shares are owned by insiders. Comparatively, 13.0% of Ebix shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares QAD and Ebix’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings for QAD and Ebix, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
QAD presently has a consensus target price of $33.00, indicating a potential upside of 5.60%. Given QAD’s higher possible upside, equities research analysts clearly believe QAD is more favorable than Ebix.
QAD pays an annual dividend of $0.29 per share and has a dividend yield of 0.9%. Ebix pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. QAD pays out -34.1% of its earnings in the form of a dividend. Ebix pays out 9.9% 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. QAD is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
QAD has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Ebix has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.
Ebix beats QAD on 10 of the 16 factors compared between the two stocks.
QAD Company Profile
QAD Inc. (QAD) is a provider of vertically oriented enterprise software solutions for global manufacturing companies across the automotive, life sciences, consumer products, food and beverage, high technology and industrial products industries. QAD Enterprise Applications enables measurement and control of business processes and supports operational requirements, including financials, manufacturing, demand and supply chain planning, customer management, business intelligence and business process management. QAD delivers components of its solution for a range of mobile platforms. The Company’s mobile suite includes a requisition approval solution, a mobile business intelligence solution, mobile browse capability and mobile application monitoring tools to support system administrators. Its mobile browse capability allows users to view, filter and sort data accessible through QAD Browses within QAD Enterprise Applications using mobile devices.
Ebix Company Profile
Ebix, Inc. (Ebix) is a supplier of software and e-commerce solutions to the insurance industry. Ebix provides application software products for the insurance industry, including carrier systems, agency systems and exchanges, as well as custom software development. Ebix conducts its operations through four channels, which include Exchanges, Carrier Systems, Broker Systems and Risk Compliance Solutions (RCS). Ebix operates data exchanges in the areas of life insurance, annuities, employee health benefits, risk management, workers compensation, and property and casualty (P&C) insurance. Ebix designs and deploys back-end systems for P&C insurance brokers across the world. Ebix also designs and deploys on-demand and back-end systems for P&C insurance companies. Ebix focus in RCS channel pertains to business process outsourcing services that include providing project management, time and material consulting to clients across the world, and claims adjudication/settlement services.
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