Perficient (NASDAQ: PRFT) and Evertec (NYSE:EVTC) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Insider and Institutional Ownership

75.1% of Perficient shares are held by institutional investors. Comparatively, 78.0% of Evertec shares are held by institutional investors. 3.7% of Perficient shares are held by insiders. Comparatively, 1.4% of Evertec shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Evertec pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. Perficient does not pay a dividend. Evertec pays out 37.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Perficient and Evertec’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Perficient $452.14 million 1.41 $47.43 million $0.42 43.29
Evertec $401.15 million 3.34 $157.72 million $1.06 17.45

Evertec has higher revenue, but lower earnings than Perficient. Evertec is trading at a lower price-to-earnings ratio than Perficient, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Perficient has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Evertec has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Perficient and Evertec, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Perficient 0 1 2 0 2.67
Evertec 0 3 0 0 2.00

Perficient presently has a consensus price target of $20.50, suggesting a potential upside of 12.76%. Evertec has a consensus price target of $18.33, suggesting a potential downside of 0.90%. Given Perficient’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Perficient is more favorable than Evertec.

Profitability

This table compares Perficient and Evertec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Perficient 3.08% 7.42% 5.82%
Evertec 19.64% 107.21% 14.29%

Summary

Evertec beats Perficient on 9 of the 16 factors compared between the two stocks.

Perficient Company Profile

Perficient, Inc. is an information technology and management consulting firm. The Company’s solutions include business intelligence and analytics, commerce, content management, custom applications, platform implementations, portals and collaboration, business integration and application program interfaces, management consulting, business process management, and customer relationship management, among others. It provides services to the healthcare (pharma and life sciences), financial services (banking and insurance), retail and consumer goods, automotive and transport products, electronics and computer hardware, telecommunications, manufacturing, business services, and leisure, and media and entertainment markets, among others.

Evertec Company Profile

EVERTEC, Inc. is a transaction processing company. The Company provides a range of merchant acquiring, payment processing and business process management services. The Company operates through three segments: Merchant Acquiring, Payment Processing and Business Solutions. As of December 31, 2016, it managed a system of electronic payment networks that processed over two billion transactions annually. It offers a range of services for core bank processing, cash processing and technology outsourcing. It owns and operates the ATH network, which is a personal identification number (PIN) debit network in Latin America. It serves a range of financial institutions, merchants, corporations and government agencies with solutions that enable them to issue, process and accept transactions securely. The Company’s range of services spans the entire transaction processing value chain and includes a range of front-end customer-facing solutions.

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