Gigamon (NYSE: GIMO) and Blackbaud (NASDAQ:BLKB) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Earnings and Valuation

This table compares Gigamon and Blackbaud’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gigamon $307.25 million 5.29 $10.55 million $0.07 620.00
Blackbaud $757.18 million 5.20 $131.91 million $1.02 82.75

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

Dividends

Blackbaud pays an annual dividend of $0.48 per share and has a dividend yield of 0.6%. Gigamon does not pay a dividend. Blackbaud pays out 47.1% of its earnings in the form of a dividend.

Profitability

This table compares Gigamon and Blackbaud’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gigamon 0.95% 0.41% 0.28%
Blackbaud 6.46% 30.88% 6.29%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Gigamon and Blackbaud, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gigamon 0 7 5 0 2.42
Blackbaud 1 3 4 0 2.38

Gigamon currently has a consensus target price of $46.30, indicating a potential upside of 6.68%. Blackbaud has a consensus target price of $81.71, indicating a potential downside of 3.18%. Given Gigamon’s stronger consensus rating and higher probable upside, analysts clearly believe Gigamon is more favorable than Blackbaud.

Insider & Institutional Ownership

98.0% of Gigamon shares are owned by institutional investors. 4.5% of Gigamon shares are owned by company insiders. Comparatively, 2.7% of Blackbaud shares are owned by company 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.

Volatility & Risk

Gigamon has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Blackbaud has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Summary

Gigamon beats Blackbaud on 9 of the 16 factors compared between the two stocks.

About Gigamon

Gigamon Inc. offers a solution that delivers visibility and control of data-in-motion traversing enterprise, federal and service provider networks. The Company’s Visibility Platform consists of a distributed system of nodes (that in combination establish a Visibility Fabric). The Visibility Platform includes physical appliances and virtual nodes that can be deployed in data centers, central offices, virtualized/private cloud/public cloud environments, and small form-factor remote site appliances, which in combination enable pervasive visibility of network infrastructures. Its GigaSECURE Security Delivery Platform enables security teams and information technology (IT) personnel to gain visibility into their IT infrastructure by forwarding selected traffic of interest from network, server and remote location infrastructure to security, management, analysis and compliance tools in a manner that is optimized for specific uses or functions.

About Blackbaud

Blackbaud, Inc. is a cloud software company. The Company offers a range of cloud and on-premise solutions, as well as a resource network that empowers and connects organizations of all sizes. Its segments include the General Markets Business Unit (the GMBU), the Enterprise Customer Business Unit (the ECBU) and the International Business Unit (the IBU). The GMBU is focused on marketing, sales, delivery and support to all emerging and mid-sized prospects and customers in North America. The ECBU is focused on marketing, sales, delivery and support to all large and/or strategic prospects and customers in North America. The IBU is focused on marketing, sales, delivery and support to all prospects and customers outside of North America. It operates in four geographic regions: the United States, Canada, Europe and Australia. Its portfolio of software and services supports nonprofit fundraising and relationship management, digital marketing, advocacy, accounting, payments and analytics.

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