Reviewing FactSet Research Systems (FDS) & Switch (SWCH)

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FactSet Research Systems (NYSE: SWCH) and Switch (NYSE:SWCH) are both mid-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent ratings and recommmendations for FactSet Research Systems and Switch, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FactSet Research Systems 2 10 1 0 1.92
Switch 0 8 5 0 2.38

FactSet Research Systems currently has a consensus price target of $195.00, suggesting a potential downside of 17.05%. Switch has a consensus price target of $16.75, suggesting a potential upside of 50.77%. Given Switch’s stronger consensus rating and higher possible upside, analysts plainly believe Switch is more favorable than FactSet Research Systems.

Earnings and Valuation

This table compares FactSet Research Systems and Switch’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FactSet Research Systems $1.22 billion 7.38 $258.25 million $7.31 32.16
Switch $378.27 million 7.42 -$15.20 million N/A N/A

FactSet Research Systems has higher revenue and earnings than Switch.

Profitability

This table compares FactSet Research Systems and Switch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FactSet Research Systems 19.37% 55.91% 22.72%
Switch -12.35% 0.49% 0.21%

Insider & Institutional Ownership

91.5% of FactSet Research Systems shares are owned by institutional investors. Comparatively, 18.1% of Switch shares are owned by institutional investors. 2.7% of FactSet Research Systems shares are owned by insiders. Comparatively, 12.6% of Switch shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

FactSet Research Systems pays an annual dividend of $2.56 per share and has a dividend yield of 1.1%. Switch pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. FactSet Research Systems pays out 35.0% of its earnings in the form of a dividend. FactSet Research Systems has increased its dividend for 12 consecutive years. FactSet Research Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

FactSet Research Systems beats Switch on 8 of the 14 factors compared between the two stocks.

FactSet Research Systems Company Profile

FactSet Research Systems Inc. provides integrated financial information and analytical applications to the investment community in the United States, Europe, and the Asia Pacific. It delivers insight and information to financial investment professionals through its analytics, services, contents, and technologies. The company integrates datasets and analytics across asset classes, and supports the workflow of buy-side and sell-side clients. Its applications suite offers tools and resources, including company and industry analyses, full screening tools, portfolio analysis, risk profiles, alpha-testing, portfolio optimization, and research management solutions. The company enables its clients to streamline real-time data and historical information, including quotes, estimates, news, and commentary, as well as offers unique and third-party content through desktop, wireless, and off-platform solutions. It serves portfolio managers, wealth managers, research and performance analysts, risk managers, research professionals, investment bankers, and fixed income professionals. FactSet Research Systems Inc. was founded in 1978 and is headquartered in Norwalk, Connecticut.

Switch Company Profile

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services to technology and digital media companies, cloud and managed service providers, financial institutions, and telecommunications providers that conduct critical business on the Internet. The company develops and operates data centers in Nevada, Michigan, and Georgia. Switch, Inc. was founded in 2000 and is headquartered in Las Vegas, Nevada.

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