DST Systems (NYSE: DST) and LivePerson (NASDAQ:LPSN) are both it services & consulting – nec companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Volatility and Risk

DST Systems has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, LivePerson has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for DST Systems and LivePerson, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DST Systems 0 1 2 0 2.67
LivePerson 0 1 5 0 2.83

DST Systems currently has a consensus price target of $68.33, indicating a potential upside of 13.55%. LivePerson has a consensus price target of $15.06, indicating a potential upside of 35.66%. Given LivePerson’s stronger consensus rating and higher probable upside, analysts clearly believe LivePerson is more favorable than DST Systems.

Profitability

This table compares DST Systems and LivePerson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DST Systems 21.26% 16.20% 6.60%
LivePerson -11.07% -4.41% -2.77%

Dividends

DST Systems pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. LivePerson does not pay a dividend. DST Systems pays out 10.9% of its earnings in the form of a dividend.

Institutional and Insider Ownership

85.4% of DST Systems shares are held by institutional investors. Comparatively, 76.0% of LivePerson shares are held by institutional investors. 1.8% of DST Systems shares are held by company insiders. Comparatively, 11.7% of LivePerson shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares DST Systems and LivePerson’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
DST Systems $1.56 billion 2.33 $427.30 million $6.62 9.09
LivePerson $222.78 million 2.97 -$25.87 million ($0.43) -25.81

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

Summary

DST Systems beats LivePerson on 9 of the 15 factors compared between the two stocks.

DST Systems Company Profile

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.

LivePerson Company Profile

LivePerson, Inc. (Liveperson) is a provider of mobile and online business messaging technologies that power digital communication between brands and consumers. The Company’s segments include Business and Consumer. The Business segment enables brands to leverage its cloud-based LiveEngage’s intelligence engine. The Consumer segment facilitates online transactions between independent service providers (Experts) and individual consumers (Users) seeking information and knowledge for a fee through mobile and online messaging. The Company’s platform, LiveEngage, enables businesses to create a meaningful connection with consumers by offering messaging as a preferred channel of communication. The Company’s products and services include LiveEngage, Professional Services and Consumer Offering. As a cloud computing or software-as-a-service (SaaS) provider, LivePerson provides solutions on a hosted basis. LiveEngage enables the combination of real time on-site data and off-site behavioral data.

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