Critical Comparison: Simulations Plus (SLP) vs. Leidos (LDOS)
Simulations Plus (NASDAQ:SLP) and Leidos (NYSE:LDOS) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.
Insider & Institutional Ownership
40.7% of Simulations Plus shares are held by institutional investors. Comparatively, 76.9% of Leidos shares are held by institutional investors. 31.6% of Simulations Plus shares are held by insiders. Comparatively, 1.2% of Leidos shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Simulations Plus pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Leidos pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. Simulations Plus pays out 48.0% of its earnings in the form of a dividend. Leidos pays out 29.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Simulations Plus has increased its dividend for 2 consecutive years. Leidos is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Simulations Plus and Leidos’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Simulations Plus||$29.67 million||13.08||$8.93 million||$0.50||44.32|
|Leidos||$10.19 billion||0.92||$582.00 million||$4.38||14.83|
Leidos has higher revenue and earnings than Simulations Plus. Leidos is trading at a lower price-to-earnings ratio than Simulations Plus, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Simulations Plus has a beta of -0.5, suggesting that its share price is 150% less volatile than the S&P 500. Comparatively, Leidos has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Simulations Plus and Leidos, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Leidos has a consensus price target of $74.25, suggesting a potential upside of 14.30%. Given Leidos’ stronger consensus rating and higher probable upside, analysts clearly believe Leidos is more favorable than Simulations Plus.
This table compares Simulations Plus and Leidos’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Leidos beats Simulations Plus on 10 of the 17 factors compared between the two stocks.
About Simulations Plus
Simulations Plus, Inc. develops drug discovery and development software for mechanistic modeling and simulation, and machine-learning-based prediction of properties of molecules from their structure worldwide. The company offers GastroPlus, which simulates the absorption, pharmacokinetics (PK), pharmacodynamics, and drug-drug interactions of compounds administered to humans and animals; DDDPlus that simulates in vitro laboratory experiments that measure the rate of dissolution of the drug and additives in a dosage form; and MembranePlus, which simulates laboratory experiments. It also provides PKPlus, a standalone program that provides the functionality needed by pharmaceutical industry scientists to perform the analyses and generate the outputs needed to satisfy regulatory agency requirements for NCA and compartmental PK modelling; ADMET Predictor, a chemistry-based computer program that takes molecular structures as inputs and predicts their properties; and MedChem Designer, a molecule drawing program or sketcher. In addition, it offers MedChem Studio, a software tool for data mining and designing new molecules; KIWI, a cloud-based Web application to organizes, processes, maintains, and communicates the volume of data and results generated by pharmacologists and scientists over the duration of a drug development program; DILIsym, a quantitative systems pharmacology software; NAFLDsym, a simulation program for analyzing nonalcoholic fatty liver disease; and RENAsym for investigating and predicting drug-induced or acute kidney injury. Further, the company provides population modeling and simulation contract research services for the pharmaceutical and biotechnology industries; and clinical-pharmacology-based consulting services in support of regulatory submissions. It sells its pharmaceutical/chemistry software to pharmaceutical, biotechnology, agrochemical, cosmetics, and food companies. The company was founded in 1996 and is headquartered in Lancaster, California.
Leidos Holdings, Inc. provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. It operates through three segments: Defense Solutions, Civil, and Health. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, Department of Defense, military services, the U.S. Department of Homeland Security, and government agencies of U.S. allies abroad, as well as other federal, civilian, and commercial customers in the national security industry. Its solutions include technology, intelligence systems, command and control, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to Air Navigation Service providers, including the Federal Aviation Administration, Transportation Security Administration, and airport operators; and vehicle and cargo inspection system, which enables the scanning of vehicles and cargo that produces an image using a low radiation dose. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; federal environment and infrastructure; and logistics services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people worldwide, including complex systems integration, managed health services, enterprise IT transformation, and life sciences services. The company was founded in 1969 and is headquartered in Reston, Virginia.
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