Thomson Reuters Corp (TRI) & FactSet Research Systems (NYSE:FDS) Critical Comparison
Thomson Reuters Corp (NYSE: TRI) and FactSet Research Systems (NYSE:FDS) are both mid-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitabiliy, dividends and valuation.
This table compares Thomson Reuters Corp and FactSet Research Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Thomson Reuters Corp||28.14%||13.37%||6.07%|
|FactSet Research Systems||29.02%||55.72%||25.28%|
Volatility & Risk
Thomson Reuters Corp has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, FactSet Research Systems has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.
Thomson Reuters Corp pays an annual dividend of $1.38 per share and has a dividend yield of 3.0%. FactSet Research Systems pays an annual dividend of $2.24 per share and has a dividend yield of 1.3%. Thomson Reuters Corp pays out 32.5% of its earnings in the form of a dividend. FactSet Research Systems pays out 26.2% 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. Thomson Reuters Corp has raised its dividend for 11 consecutive years and FactSet Research Systems has raised its dividend for 9 consecutive years. Thomson Reuters Corp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current recommendations and price targets for Thomson Reuters Corp and FactSet Research Systems, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Thomson Reuters Corp||1||7||4||0||2.25|
|FactSet Research Systems||3||7||1||0||1.82|
Thomson Reuters Corp currently has a consensus price target of $48.50, indicating a potential upside of 5.64%. FactSet Research Systems has a consensus price target of $165.00, indicating a potential downside of 0.66%. Given Thomson Reuters Corp’s stronger consensus rating and higher probable upside, research analysts plainly believe Thomson Reuters Corp is more favorable than FactSet Research Systems.
Earnings & Valuation
This table compares Thomson Reuters Corp and FactSet Research Systems’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Thomson Reuters Corp||$11.19 billion||2.96||$2.50 billion||$4.25||10.80|
|FactSet Research Systems||$1.18 billion||5.52||$410.24 million||$8.55||19.43|
Thomson Reuters Corp has higher revenue and earnings than FactSet Research Systems. Thomson Reuters Corp is trading at a lower price-to-earnings ratio than FactSet Research Systems, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
26.5% of Thomson Reuters Corp shares are owned by institutional investors. Comparatively, 94.9% of FactSet Research Systems shares are owned by institutional investors. 2.7% of FactSet Research Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
FactSet Research Systems beats Thomson Reuters Corp on 10 of the 17 factors compared between the two stocks.
About Thomson Reuters Corp
Thomson Reuters Corporation (Thomson Reuters) is a provider of news and information for professional markets. The Company is organized in three business units: Financial & Risk, Legal, and Tax & Accounting. The Financial & Risk segment is a provider of critical news, information and analytics, enabling transactions and connecting communities of trading, investment, financial and corporate professionals. The Legal segment is a provider of critical online and print information, decision tools, software and services that support legal, investigation, business and government professionals around the world. The Tax & Accounting segment is a provider of integrated tax compliance and accounting information, software and services for professionals in accounting firms, corporations, law firms and government. The Company also operates Reuters, Global Growth Organization (GGO), and Enterprise Technology & Operations (ET&O). Thomson Reuters operates in over 100 countries.
About FactSet Research Systems
Factset Research Systems Inc. is engaged in providing integrated financial information and big data analytical applications for the global investment community. The Company’s segments include the U.S., Europe and Asia Pacific. The U.S. segment services finance professionals, including financial institutions throughout the Americas. The European segment maintains offices in France, Germany, Italy, Ireland, Latvia, Luxembourg, the Netherlands, Spain, South Africa, Sweden and Dubai. The Asia Pacific segment maintains office locations in Australia, Hong Kong, Singapore and Mumbai, India. The Company delivers insight and information to investment professionals through its analytics, service, content, and technology. Its offerings include a complete services solution focused on verifying, cleaning and loading portfolio data across asset classes, and an execution management system. The Company offers third-party content through desktop, wireless and off-platform solutions.
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