Open Text Corporation (NASDAQ: OTEX) and SolarWinds (NYSE:SWI) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Insider & Institutional Ownership

66.3% of Open Text Corporation shares are held by institutional investors. 10.6% of Open Text Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Open Text Corporation and SolarWinds, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Open Text Corporation 0 1 7 0 2.88
SolarWinds 0 0 0 0 N/A

Open Text Corporation currently has a consensus target price of $42.63, suggesting a potential upside of 32.91%. Given Open Text Corporation’s higher probable upside, equities research analysts plainly believe Open Text Corporation is more favorable than SolarWinds.

Dividends

Open Text Corporation pays an annual dividend of $0.53 per share and has a dividend yield of 1.7%. SolarWinds does not pay a dividend. Open Text Corporation pays out 12.7% of its earnings in the form of a dividend.

Profitability

This table compares Open Text Corporation and SolarWinds’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Open Text Corporation 44.77% 8.92% 4.29%
SolarWinds 20.52% 19.24% 12.70%

Earnings and Valuation

This table compares Open Text Corporation and SolarWinds’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Open Text Corporation $2.29 billion 3.68 $631.71 million $4.16 7.71
SolarWinds N/A N/A N/A N/A N/A

Open Text Corporation has higher revenue and earnings than SolarWinds.

Summary

Open Text Corporation beats SolarWinds on 7 of the 11 factors compared between the two stocks.

About Open Text Corporation

Open Text Corporation provides a platform and suite of software products and services that assist organizations in finding, utilizing, and sharing business information from any device. The Company designs, develops, markets and sells Enterprise Information Management (EIM) software and solutions. Its EIM offerings include Enterprise Content Management (ECM), Business Process Management (BPM), Customer Experience Management (CEM), Business Network, Discovery and Analytics. Its software and services allow organizations to manage the information that flows into, out of, and throughout the enterprise as part of daily operations. Its solutions incorporate collaborative and mobile technologies and are delivered for on-premises deployment, as well as through cloud, hybrid and managed hosted services models. In addition, the Company provides solutions that facilitate the exchange of information and transactions that occur between supply chain participants.

About SolarWinds

SolarWinds, Inc. (SolarWinds) is a holding company. The Company designs, develops, markets, sells and supports enterprise-class information technology (IT), infrastructure management software to IT and DevOps professionals in organizations of all sizes. Its products categories include network management, which is used to monitor and manage the performance of network infrastructure; systems management, which is used to monitor and manage the performance of applications, physical and virtual servers, storage and databases; MSP, which is used by managed service providers to monitor and manage the IT infrastructure of their end clients, SMBs, and cloud, its cloud-based products, which are used to monitor and manage applications and application infrastructure. Its customers include small- and mid-size businesses, enterprises, MSPs, and local, state and federal Government entities.

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