Head-To-Head Comparison: IHS Markit (INFO) versus Red Hat (RHT)

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IHS Markit (NASDAQ:INFO) and Red Hat (NYSE:RHT) are both large-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Risk & Volatility

IHS Markit has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Red Hat has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Valuation & Earnings

This table compares IHS Markit and Red Hat’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IHS Markit $3.60 billion 5.89 $416.90 million $1.68 32.01
Red Hat $2.92 billion 10.46 $258.80 million $2.30 75.50

IHS Markit has higher revenue and earnings than Red Hat. IHS Markit is trading at a lower price-to-earnings ratio than Red Hat, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares IHS Markit and Red Hat’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IHS Markit 14.57% 9.55% 5.07%
Red Hat 9.15% 31.80% 8.85%

Analyst Ratings

This is a summary of recent ratings and recommmendations for IHS Markit and Red Hat, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IHS Markit 1 4 10 0 2.60
Red Hat 1 15 13 0 2.41

IHS Markit currently has a consensus price target of $57.77, indicating a potential upside of 7.42%. Red Hat has a consensus price target of $163.64, indicating a potential downside of 5.76%. Given IHS Markit’s stronger consensus rating and higher possible upside, equities research analysts clearly believe IHS Markit is more favorable than Red Hat.

Insider & Institutional Ownership

96.2% of IHS Markit shares are owned by institutional investors. Comparatively, 95.8% of Red Hat shares are owned by institutional investors. 2.7% of IHS Markit shares are owned by insiders. Comparatively, 0.6% of Red Hat shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

IHS Markit beats Red Hat on 8 of the 14 factors compared between the two stocks.

IHS Markit Company Profile

IHS Markit Ltd. provides critical information, analytics, and solutions for various industries and markets that drive economies worldwide. The company's information, analytics, and solutions enhance operational efficiency and offer deep insights for customers in business, finance, and government. Its Resources segment provides upstream, midstream, downstream, and power/gas/coal/renewables services. This segment also offers data for manufacturing processes, as well as capital expenditure, cost, price, production, trade, demand, and capacity industry analysis and forecasts. The company's Transportation segment provides authoritative analysis, as well as sales and production forecasts for light vehicles, medium and heavy commercial vehicles, powertrains, components, and technology systems; and performance measurement tools and marketing solutions for car makers, dealers, and agencies. It also offers comprehensive data on ships, as well as monthly import and export statistics on approximately 90 countries; and specifications for military vehicles, naval vessels, and aircraft types. The company's Consolidated Markets & Solutions segment provides content and analytics on engineering and technical standards, codes, specifications, handbooks, reference books, journals, and other scientific and technical documents, as well as software-based engineering decision engines; components and devices, performance analytics, and end market intelligence for technology, media, and telecom industries; and economic and risk data, forecast, and analytic tools. Its Financial Services segment provides pricing and reference data, indices, valuation and trading services, trade processing, enterprise software, and managed services to traders, portfolio managers, risk managers, research professionals, and other financial markets participants, as well as operations, compliance, and enterprise data managers. IHS Markit Ltd. was founded in 1959 and is headquartered in London, the United Kingdom.

Red Hat Company Profile

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. It offers infrastructure-related solutions, such as Red Hat Enterprise Linux, an operating system platform that runs on hardware for use in hybrid cloud environments; Red Hat Satellite, a system management offering that helps to deploy, scale, and manage in hybrid cloud environments; and Red Hat Enterprise Virtualization, a software solution that allows customers to utilize and manage a common hardware infrastructure to run multiple operating systems and applications. The company offers application development-related and other technology solutions, such as Red Hat JBoss Middleware, a solution for developing, deploying, and managing applications; integrating applications, data, and devices; and automating business processes in hybrid cloud environments; The company's application development-related and other technology solutions also includes Red Hat cloud offerings, a software solution that enables customers to build and manage various cloud computing environments; Red Hat Mobile, a software development platform that enables customers to develop, integrate, deploy, and manage mobile applications for enterprises; and Red Hat Storage, a software solution that enables customers to manage large, unstructured, or semi-structured data in hybrid cloud environments. It also provides consulting, support, and training services; and realtime operating system, distributed computing, directory services, and user authentication. Red Hat, Inc. has collaboration with Juniper Networks Expand to provide a unified solution for enterprises designed to manage and run applications and services. The company was formerly known as Red Hat Software, Inc. and changed its name to Red Hat, Inc. in June 1999. Red Hat, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.

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