Booz Allen Hamilton Holding Corporation (NYSE: BAH) and Jack Henry & Associates (NASDAQ:JKHY) are both mid-cap it services & consulting – nec companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Analyst Ratings

This is a summary of current recommendations for Booz Allen Hamilton Holding Corporation and Jack Henry & Associates, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Booz Allen Hamilton Holding Corporation 0 5 5 0 2.50
Jack Henry & Associates 0 3 1 0 2.25

Booz Allen Hamilton Holding Corporation currently has a consensus target price of $39.43, suggesting a potential upside of 6.52%. Jack Henry & Associates has a consensus target price of $110.50, suggesting a potential downside of 1.41%. Given Booz Allen Hamilton Holding Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Booz Allen Hamilton Holding Corporation is more favorable than Jack Henry & Associates.

Volatility and Risk

Booz Allen Hamilton Holding Corporation has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Jack Henry & Associates has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Booz Allen Hamilton Holding Corporation and Jack Henry & Associates’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Booz Allen Hamilton Holding Corporation 4.52% 48.30% 8.07%
Jack Henry & Associates 17.08% 23.92% 13.64%

Insider & Institutional Ownership

93.7% of Booz Allen Hamilton Holding Corporation shares are held by institutional investors. Comparatively, 90.1% of Jack Henry & Associates shares are held by institutional investors. 3.0% of Booz Allen Hamilton Holding Corporation shares are held by insiders. Comparatively, 0.8% of Jack Henry & Associates shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Booz Allen Hamilton Holding Corporation pays an annual dividend of $0.68 per share and has a dividend yield of 1.8%. Jack Henry & Associates pays an annual dividend of $1.24 per share and has a dividend yield of 1.1%. Booz Allen Hamilton Holding Corporation pays out 37.8% of its earnings in the form of a dividend. Jack Henry & Associates pays out 39.1% 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. Booz Allen Hamilton Holding Corporation has increased its dividend for 4 consecutive years and Jack Henry & Associates has increased its dividend for 13 consecutive years. Booz Allen Hamilton Holding Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Booz Allen Hamilton Holding Corporation and Jack Henry & Associates’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Booz Allen Hamilton Holding Corporation $5.80 billion 0.93 $252.49 million $1.80 20.57
Jack Henry & Associates $1.43 billion 6.05 $245.79 million $3.17 35.36

Booz Allen Hamilton Holding Corporation has higher revenue and earnings than Jack Henry & Associates. Booz Allen Hamilton Holding Corporation is trading at a lower price-to-earnings ratio than Jack Henry & Associates, indicating that it is currently the more affordable of the two stocks.

Summary

Booz Allen Hamilton Holding Corporation beats Jack Henry & Associates on 11 of the 17 factors compared between the two stocks.

Booz Allen Hamilton Holding Corporation Company Profile

Booz Allen Hamilton Holding Corporation is a holding company. The Company is a provider of management and technology, consulting and engineering services to the United States and international governments, corporations and not-for-profit organizations. The Company’s client base includes government, commercial and international clients. Its commercial clients in the United States are primarily in the financial services, healthcare and life sciences, energy, high-technology manufacturing, retail, and automotive industries. Its international clients are primarily in the Middle East, along with a presence in Southeast Asia. The Company’s functional service offerings include Systems Delivery, Engineering and Science, Cyber, Analytics and Consulting. The Company’s innovation service offerings are Digital, Cyber Futures, Next Generation Analytics and Directed Energy.

Jack Henry & Associates Company Profile

Jack Henry & Associates, Inc. is a provider of information processing solutions for community banks. The Company offers a range of products and services, including processing transactions, automating business processes, and managing information financial institutions and diverse corporate entities. It operates in two segments: bank systems and services (Bank) and credit union systems and services (Credit Union). It provides its products and services through approximately three business brands, which include Jack Henry Banking, Symitar and ProfitStars. The Core software system consists of the integrated applications required to process deposit, loan, and general ledger transactions, and to maintain centralized customer/member information. Jack Henry Banking markets over three software systems to banks and Symitar markets over two software systems to credit unions. Its subsidiaries include Jack Henry Services, Inc., Symitar Systems, Inc. and Bayside Business Solutions, Inc.

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