Paycom Software (NYSE: PAYC) and Intuit (NASDAQ:INTU) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Paycom Software and Intuit, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paycom Software 0 3 8 0 2.73
Intuit 1 7 9 0 2.47

Paycom Software currently has a consensus target price of $76.17, suggesting a potential upside of 3.45%. Intuit has a consensus target price of $138.13, suggesting a potential downside of 2.43%. Given Paycom Software’s stronger consensus rating and higher possible upside, equities analysts plainly believe Paycom Software is more favorable than Intuit.

Dividends

Intuit pays an annual dividend of $1.36 per share and has a dividend yield of 1.0%. Paycom Software does not pay a dividend. Intuit pays out 36.6% of its earnings in the form of a dividend.

Risk and Volatility

Paycom Software has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, Intuit has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Valuation & Earnings

This table compares Paycom Software and Intuit’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Paycom Software $382.87 million 11.15 $73.92 million $0.93 79.17
Intuit $5.18 billion 7.02 $1.62 billion $3.72 38.05

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

Profitability

This table compares Paycom Software and Intuit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paycom Software 14.28% 35.77% 4.63%
Intuit 18.76% 82.43% 22.68%

Institutional and Insider Ownership

86.1% of Paycom Software shares are held by institutional investors. Comparatively, 85.6% of Intuit shares are held by institutional investors. 17.9% of Paycom Software shares are held by insiders. Comparatively, 5.7% of Intuit shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Paycom Software Company Profile

Paycom Software, Inc. is a provider of a cloud-based human capital management (HCM) software solution delivered as Software-as-a-Service (SaaS). The Company provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement. The Company’s applications streamline client processes and provide clients and their employees with the ability to directly access and manage administrative processes, including applications that identify candidates, on-board employees, manage time and labor, administer payroll deductions and benefits, manage performance, terminate employees and administer post-termination health benefits, such as COBRA. The Company’s solution allows clients to analyze employee information to make business decisions. The Company’s HCM solution offers a range of applications, including talent acquisition, time and labor management, payroll, talent management and human resources (HR) management.

Intuit Company Profile

Intuit Inc. is a provider of business and financial management solutions for small businesses, consumers and accounting professionals. The Company operates through three segments: Small Business, Consumer Tax and ProConnect. The Small Business segment serves and advises small businesses and the accounting professionals, and includes QuickBooks financial and business management online services and desktop software, payroll solutions, and payment processing solutions. The Small Business segment also includes third-party applications that integrate with the Company’s offerings. The Consumer Tax segment targets consumers and includes TurboTax products and services, which enable individuals to prepare and file their own federal and state personal income tax returns. The ProConnect segment targets professional accountants in the United States and Canada. Its ProConnect professional tax offerings include Lacerte, ProSeries, ProFile and ProConnect Tax Online.

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