Financial Analysis: Thomson Reuters (TRI) vs. Equifax (EFX)
Thomson Reuters (NYSE: TRI) and Equifax (NYSE:EFX) are both large-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.
Risk and Volatility
Thomson Reuters has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Equifax has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.
24.6% of Thomson Reuters shares are held by institutional investors. Comparatively, 95.5% of Equifax shares are held by institutional investors. 1.3% of Equifax shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Thomson Reuters and Equifax’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Thomson Reuters||$11.17 billion||2.81||$3.10 billion||$1.48||29.78|
|Equifax||$3.14 billion||4.36||$488.80 million||$4.42||25.82|
Thomson Reuters has higher revenue and earnings than Equifax. Equifax is trading at a lower price-to-earnings ratio than Thomson Reuters, indicating that it is currently the more affordable of the two stocks.
Thomson Reuters pays an annual dividend of $1.38 per share and has a dividend yield of 3.1%. Equifax pays an annual dividend of $1.56 per share and has a dividend yield of 1.4%. Thomson Reuters pays out 93.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equifax pays out 35.3% of its earnings in the form of a dividend. Thomson Reuters has increased its dividend for 5 consecutive years and Equifax has increased its dividend for 9 consecutive years.
This table compares Thomson Reuters and Equifax’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and target prices for Thomson Reuters and Equifax, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Thomson Reuters presently has a consensus price target of $51.08, indicating a potential upside of 15.91%. Equifax has a consensus price target of $128.07, indicating a potential upside of 12.22%. Given Thomson Reuters’ higher possible upside, equities research analysts plainly believe Thomson Reuters is more favorable than Equifax.
Equifax beats Thomson Reuters on 12 of the 17 factors compared between the two stocks.
About Thomson Reuters
Thomson Reuters Corp (Thomson Reuters) is a Canada-based provider of news and information for professional markets. The Company is organized in three business units: Financial & Risk, Legal, and Tax & Accounting. The Financial & Risk unit is a provider of critical news, information and analytics, enabling transactions and connecting communities of trading, investment, financial and corporate professionals. The Legal unit is a provider of critical online and print information, decision tools, software and services that support legal, investigation, business and government professionals around the world. The Tax & Accounting unit is a provider of integrated tax compliance and accounting information, software and services for professionals in accounting firms, corporations, law firms and government. The Company also operates Reuters, Global Growth Organization (GGO) and Enterprise Technology & Operations (ET&O). Thomson Reuters operates in over 100 countries.
Equifax Inc. is a global provider of information solutions and human resources business process outsourcing services for businesses, governments and consumers. The Company operates in four segments: U.S. Information Solutions (USIS), International, Workforce Solutions and Global Consumer Solutions. Its products and services are based on databases of consumer and business information derived from various sources, including credit, financial assets, telecommunications and utility payments, employment, income, demographic and marketing data. It uses statistical techniques and software tools to analyze all available data, creating customized insights, decision-making solutions and processing services for its clients. It helps consumers understand, manage and protect their personal information and make more informed financial decisions. The Company also provides information, technology and services to support debt collections and recovery management.
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