Critical Review: VeriSign (VRSN) vs. Black Knight Financial Services (BKFS)
VeriSign (NASDAQ: VRSN) and Black Knight Financial Services (NYSE:BKFS) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.
Insider & Institutional Ownership
99.9% of Black Knight Financial Services shares are held by institutional investors. 0.9% of VeriSign shares are held by insiders. Comparatively, 30.9% of Black Knight Financial Services shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares VeriSign and Black Knight Financial Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Black Knight Financial Services||3.96%||8.29%||4.28%|
This is a summary of current recommendations for VeriSign and Black Knight Financial Services, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Black Knight Financial Services||0||1||6||0||2.86|
VeriSign presently has a consensus target price of $89.67, suggesting a potential downside of 13.73%. Black Knight Financial Services has a consensus target price of $46.40, suggesting a potential upside of 7.04%. Given Black Knight Financial Services’ stronger consensus rating and higher possible upside, analysts plainly believe Black Knight Financial Services is more favorable than VeriSign.
Risk & Volatility
VeriSign has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Black Knight Financial Services has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.
Earnings and Valuation
This table compares VeriSign and Black Knight Financial Services’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|VeriSign||$1.15 billion||9.03||$747.69 million||$3.67||28.32|
|Black Knight Financial Services||$1.05 billion||2.76||$356.90 million||$0.60||72.25|
VeriSign has higher revenue and earnings than Black Knight Financial Services. VeriSign is trading at a lower price-to-earnings ratio than Black Knight Financial Services, indicating that it is currently the more affordable of the two stocks.
VeriSign, Inc. is a provider of domain name registry services and Internet security. The Company operates through Registry Services and Security Services segment. Registry Services ensure the security, stability and resiliency of Internet infrastructure and services, including the .com and .net domains, and operation of the root-zone maintainer functions for the core of the Internet’s Domain Name System (DNS). Security Services provides infrastructure assurance services consisting of Distributed Denial of Services (DDoS) Protection Services and Managed DNS Services. DDoS Protection Services supports online business continuity by providing monitoring and mitigation services against DDoS attacks. Managed DNS Services is a hosting service that delivers DNS resolution for the availability of Web-based systems.
About Black Knight Financial Services
Black Knight Financial Services, Inc. is a holding company. The Company, through its subsidiaries, provides integrated technology, workflow automation, and data and analytics to the mortgage and real estate industries. The Company’s segments include Technology, and Data and Analytics. The Company’s Technology segment offers software and hosting solutions that support loan servicing, loan origination and settlement services. The Technology segment provides applications and services, such as servicing technology and origination technology. Its Data and Analytics segment offers data and analytics solutions to the mortgage, real estate and capital markets industries. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, prepayment and default models, lead generation and other data solutions.
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