Fair Isaac Corporation (NYSE: FICO) and HubSpot (NYSE:HUBS) are both mid-cap enterprise software companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Dividends

Fair Isaac Corporation pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. HubSpot does not pay a dividend. Fair Isaac Corporation pays out 1.0% of its earnings in the form of a dividend.

Institutional & Insider Ownership

88.1% of Fair Isaac Corporation shares are held by institutional investors. Comparatively, 95.7% of HubSpot shares are held by institutional investors. 5.6% of Fair Isaac Corporation shares are held by insiders. Comparatively, 12.1% of HubSpot shares are held 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.

Profitability

This table compares Fair Isaac Corporation and HubSpot’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fair Isaac Corporation 13.76% 30.03% 10.29%
HubSpot -12.16% -21.93% -7.61%

Analyst Recommendations

This is a breakdown of current ratings for Fair Isaac Corporation and HubSpot, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fair Isaac Corporation 0 1 1 0 2.50
HubSpot 0 2 17 0 2.89

Fair Isaac Corporation currently has a consensus target price of $150.00, indicating a potential downside of 1.61%. HubSpot has a consensus target price of $82.50, indicating a potential downside of 0.30%. Given HubSpot’s stronger consensus rating and higher probable upside, analysts clearly believe HubSpot is more favorable than Fair Isaac Corporation.

Risk and Volatility

Fair Isaac Corporation has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, HubSpot has a beta of 2.4, suggesting that its share price is 140% more volatile than the S&P 500.

Earnings & Valuation

This table compares Fair Isaac Corporation and HubSpot’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Fair Isaac Corporation $932.16 million 5.01 $128.25 million $3.98 38.30
HubSpot $270.97 million 11.41 -$45.56 million ($1.16) -71.34

Fair Isaac Corporation has higher revenue and earnings than HubSpot. HubSpot is trading at a lower price-to-earnings ratio than Fair Isaac Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

HubSpot beats Fair Isaac Corporation on 8 of the 15 factors compared between the two stocks.

About Fair Isaac Corporation

Fair Isaac Corporation (FICO) is a provider of analytic, software and data management products and services that enable businesses to automate and connect decisions. The Company operates through three segments: Applications, Scores and Decision Management Software. The Applications segment includes pre-configured decision management applications designed for a specific type of business problem or process, such as marketing, account origination, customer management, fraud, collections and insurance claims management. The Scores segment includes business-to-business scoring solutions and services, business-to-consumer scoring solutions and services, including myFICO solutions for consumers. The Decision Management Software segment consists of analytic and decision management software tools that clients can use to create their own custom decision management applications, its new FICO Decision Management Suite, as well as associated professional services.

About HubSpot

HubSpot, Inc. (HubSpot) provides a cloud-based marketing and sales software platform. The Company’s software platform features integrated applications to help businesses attract visitors to their Websites, convert visitors into leads, close leads into customers and delight customers so that they become promoters of those businesses. These integrated applications include social media, search engine optimization, blogging, Website content management, marketing automation, e-mail, sales productivity, customer relationship management (CRM), analytics and reporting. The Company’s products include HubSpot Marketing, HubSpot CRM and HubSpot Sales. The Company offers Professional Services and support. It offers professional services to educate and train customers on how to leverage its software platform and inbound marketing methodology to transform how their business attracts, engages and delights customers.

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