Pegasystems (NASDAQ:PEGA) versus Trend Micro (OTCMKTS:TMICY) Head-To-Head Contrast

Trend Micro (OTCMKTS:TMICY) and Pegasystems (NASDAQ:PEGA) 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 profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Insider and Institutional Ownership

0.1% of Trend Micro shares are held by institutional investors. Comparatively, 46.9% of Pegasystems shares are held by institutional investors. 49.7% of Pegasystems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Trend Micro and Pegasystems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trend Micro	0	0	0	0	0.00
Pegasystems	0	2	9	0	2.82

Pegasystems has a consensus target price of $70.55, suggesting a potential upside of 86.00%. Given Pegasystems’ stronger consensus rating and higher possible upside, analysts plainly believe Pegasystems is more favorable than Trend Micro.

Volatility and Risk

Trend Micro has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Dividends

Trend Micro pays an annual dividend of $0.95 per share and has a dividend yield of 2.5%. Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Trend Micro pays out 53.4% of its earnings in the form of a dividend. Pegasystems pays out 8.1% 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.

Profitability

This table compares Trend Micro and Pegasystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trend Micro	12.78%	29.95%	9.11%
Pegasystems	22.54%	41.66%	19.38%

Earnings and Valuation

This table compares Trend Micro and Pegasystems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trend Micro	$1.80 billion	3.00	$226.77 million	$1.78	21.54
Pegasystems	$1.75 billion	3.69	$99.19 million	$1.49	25.46

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

Summary

Pegasystems beats Trend Micro on 11 of the 16 factors compared between the two stocks.

About Trend Micro

Trend Micro Incorporated develops and sells security-related software for computers and related services in Japan and internationally. The company offers platforms, such as vision one platform, attack surface management, extended detection and response (XDR), cloud security, endpoint security, network security, email security, OT/ICS security, and threat intelligence. It also provides services packages, managed XDR, incident response, and support services. Additionally, the company serves 5G networks, healthcare, manufacturing, oil and gas, electric utility, and automotive industries. The company was incorporated in 1965 and is headquartered in Tokyo, Japan.

About Pegasystems

Pegasystems Inc. develops, markets, licenses, hosts, and supports enterprise software in the United States, rest of the Americas, the United Kingdom, rest of Europe, the Middle East, Africa, and the Asia-Pacific. The company provides Pega Infinity, a software portfolio comprising of Pega Customer Decision Hub, a real-time AI-powered decision engine to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega Customer Service to anticipate customer needs, connect customers to people and systems, and automate customer interactions to evolve the customer service experience, as well as to allow enterprises to deliver interactions across channels and enhance employee productivity; and Pega Platform, an intelligent automation software for increasing efficiency of clients’ processes and workflows. It also offers Situational Layer Cake that organizes logic into layers that map to the unique dimensions of a client’s business, such as customer types, lines of business, geographies, etc.; Pega Express Methodology and low code that connects enterprise data and systems to customer experience channels; Pega Cloud that allows clients to develop, test, and deploy applications; Pega Catalyst, which helps clients to transform and prototype their customer journeys; Pega Academy, which offers instructor-led and online training to its employees, clients, and partners; and global service assurance and client support services. It primarily markets its software and services to financial services, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services markets through a direct sales force, as well as partnerships with technology providers and application developers. Pegasystems Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.