Financial Contrast: Teradata Corporation (TDC) and DST Systems (DST)
Teradata Corporation (NYSE: TDC) and DST Systems (NYSE:DST) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.
Risk and Volatility
Teradata Corporation has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, DST Systems has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.
This table compares Teradata Corporation and DST Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
85.0% of DST Systems shares are held by institutional investors. 1.7% of Teradata Corporation shares are held by insiders. Comparatively, 1.8% of DST Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
DST Systems pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Teradata Corporation does not pay a dividend. DST Systems pays out 7.1% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Teradata Corporation and DST Systems’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Teradata Corporation||$2.18 billion||1.95||$250.00 million||$0.76||44.37|
|DST Systems||$1.85 billion||1.80||$404.50 million||$10.13||5.44|
DST Systems has higher revenue, but lower earnings than Teradata Corporation. DST Systems is trading at a lower price-to-earnings ratio than Teradata Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and recommmendations for Teradata Corporation and DST Systems, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Teradata Corporation presently has a consensus price target of $29.71, indicating a potential downside of 11.88%. DST Systems has a consensus price target of $72.00, indicating a potential upside of 30.81%. Given DST Systems’ stronger consensus rating and higher possible upside, analysts clearly believe DST Systems is more favorable than Teradata Corporation.
DST Systems beats Teradata Corporation on 9 of the 15 factors compared between the two stocks.
About Teradata Corporation
Teradata Corporation is a provider of analytic data platforms, analytic applications and related services. The Company’s segments include Americas region (North America and Latin America) and International region (Europe, Middle East, Africa, Asia Pacific and Japan). Its offerings include analytics solutions, ecosystem architecture consulting and hybrid cloud solutions. These solutions include software and hardware technology components, such as data warehousing, big data, tools for data integration, data discovery and business intelligence. Its services include a range of offerings, including consulting to enable organizations design, optimize and manage their analytic and big data environments, either on-premises or in the cloud. Its consulting services provide expertise in data architecture services; cloud, including software as a service and analytics as a service; private cloud; managed services, and related installation services.
About DST Systems
DST Systems, Inc. (DST) is a provider of technology-based information processing and servicing solutions. The Company offers its solutions through data management, business processing and customer communications solutions to clients within the asset management, brokerage, retirement and healthcare markets. The Company operates through two segments: Financial Services and Healthcare Services. Through the Financial Services segment, DST provides investor, investment, advisor/intermediary and asset distribution services to companies within the financial services industry. The Healthcare Services segment uses the Company’s software applications to provide healthcare organizations a range of medical and pharmacy benefit solutions to aid their information processing, quality of care, cost management and payment integrity needs. Its investments in equity securities, private equity investments, real estate and certain financial interests are aggregated into an Investments and Other segment.
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