Critical Review: Cadence Design Systems (CDNS) versus SS&C Technologies (SSNC)
Cadence Design Systems (NASDAQ: CDNS) and SS&C Technologies (NASDAQ:SSNC) are both mid-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.
This is a breakdown of current recommendations for Cadence Design Systems and SS&C Technologies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cadence Design Systems||0||3||3||0||2.50|
Volatility and Risk
Cadence Design Systems has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, SS&C Technologies has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.
This table compares Cadence Design Systems and SS&C Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cadence Design Systems||13.45%||29.00%||11.60%|
SS&C Technologies pays an annual dividend of $0.28 per share and has a dividend yield of 0.7%. Cadence Design Systems does not pay a dividend. SS&C Technologies pays out 26.7% of its earnings in the form of a dividend.
Valuation and Earnings
This table compares Cadence Design Systems and SS&C Technologies’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cadence Design Systems||$1.82 billion||6.80||$203.08 million||$0.93||47.05|
|SS&C Technologies||$1.48 billion||5.68||$130.99 million||$1.05||38.90|
Cadence Design Systems has higher revenue and earnings than SS&C Technologies. SS&C Technologies is trading at a lower price-to-earnings ratio than Cadence Design Systems, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
84.6% of Cadence Design Systems shares are held by institutional investors. Comparatively, 86.1% of SS&C Technologies shares are held by institutional investors. 2.6% of Cadence Design Systems shares are held by insiders. Comparatively, 17.6% of SS&C Technologies 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.
SS&C Technologies beats Cadence Design Systems on 10 of the 17 factors compared between the two stocks.
Cadence Design Systems Company Profile
Cadence Design Systems, Inc. provides solutions that enable its customers to design electronic products. The Company’s product categories include Functional Verification, Digital integrated circuits (IC) Design and Signoff, Custom IC Design and Verification, System Interconnect and Analysis, and intellectual property (IP). Functional verification products are used to verify that the circuitry or the software designed will perform as intended. Digital IC design offerings are used to create representations of a digital circuit or an IC that can be verified for correctness prior to implementation. Custom IC design and verification offerings are used to create schematic and physical representations of circuits down to the transistor level for analog and memory designs. System Interconnect and Analysis offerings are used to develop printed circuit boards and IC packages. Design IP offerings consist of functional blocks, which customers integrate into their ICs for the development process.
SS&C Technologies Company Profile
SS&C Technologies Holdings, Inc. is a holding company. The Company is a provider of software products and software-enabled services that allow financial services providers to automate complex business processes and manage their information processing requirements. The Company’s portfolio of software products and software-enabled services allows its clients to automate and integrate front-office functions, such as trading and modeling, middle-office functions, such as portfolio management and reporting, and back-office functions, such as accounting, performance measurement, reconciliation, reporting, processing and clearing. The Company provides its solutions across the globe to over 11,000 clients, principally within the institutional asset and wealth management, alternative investment management, financial advisory and financial institutions vertical markets. Its portfolio includes over 90 products and software-enabled services.
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