Contrasting Donnelley Financial Solutions (NYSE:DFIN) & Tyler Technologies (NYSE:TYL)

Tyler Technologies (NYSE:TYL) and Donnelley Financial Solutions (NYSE:DFIN) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.

Valuation & Earnings

This table compares Tyler Technologies and Donnelley Financial Solutions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tyler Technologies	$2.30 billion	8.66	$263.03 million	$7.19	64.32
Donnelley Financial Solutions	$781.90 million	1.52	$92.40 million	$1.05	42.62

Tyler Technologies has higher revenue and earnings than Donnelley Financial Solutions. Donnelley Financial Solutions is trading at a lower price-to-earnings ratio than Tyler Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Tyler Technologies and Donnelley Financial Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tyler Technologies	0	4	9	0	2.69
Donnelley Financial Solutions	0	1	2	0	2.67

Tyler Technologies presently has a consensus target price of $660.09, indicating a potential upside of 42.73%. Donnelley Financial Solutions has a consensus target price of $63.50, indicating a potential upside of 41.90%. Given Tyler Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Tyler Technologies is more favorable than Donnelley Financial Solutions.

Institutional & Insider Ownership

93.3% of Tyler Technologies shares are owned by institutional investors. Comparatively, 93.8% of Donnelley Financial Solutions shares are owned by institutional investors. 1.1% of Tyler Technologies shares are owned by insiders. Comparatively, 11.9% of Donnelley Financial Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Tyler Technologies has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Donnelley Financial Solutions has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Profitability

This table compares Tyler Technologies and Donnelley Financial Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tyler Technologies	13.72%	10.64%	7.10%
Donnelley Financial Solutions	4.33%	22.46%	11.35%

Summary

Tyler Technologies beats Donnelley Financial Solutions on 9 of the 14 factors compared between the two stocks.

About Tyler Technologies

Tyler Technologies, Inc. provides integrated information management solutions and services for the public sector. It operates in two segments, Enterprise Software and Platform Technologies. The company offers platform and transformative technology solutions, including cybersecurity for government agencies; data and insights solutions; digital solutions that helps workers and policymakers to share, communicate, and leverage data; payments solutions, such as billing, presentment, merchant onboarding, collections, reconciliation, and disbursements; platform technologies, an application development platform that enables government workers to build solutions and applications; and outdoor recreation solutions, including campsite reservations, activity registrations, licensing sales and renewals, and real-time data for conservation and park management. It also provides public administration solutions, such as civic services; financial applications with human resources, revenue management, tax billing, utilities, asset management, and payment processing; property and recording service that manages appraisal services, valuation, tax billing and collections, assessment administration, and land and official records; and permitting, licensing, and regulatory management solutions. In addition, the company offers courts and public safety solutions; school ERP and student transportation solutions for K-12 schools; and health and human services solutions. Further, the company offers software as a service arrangements and electronic document filing solutions for courts; software and hardware installation, data conversion, training, product modification, and maintenance and support services; and property appraisal outsourcing services for taxing jurisdictions. Tyler Technologies, Inc. has a strategic collaboration agreement with Amazon Web Services for cloud hosting services. The company was founded in 1966 and is headquartered in Plano, Texas.

About Donnelley Financial Solutions

Donnelley Financial Solutions, Inc. provides innovative software and technology-enabled financial regulatory and compliance solutions in the United States, Asia, Europe, Canada, and internationally. It operates through four segments: Capital Markets Software Solutions (CM-SS); Capital Markets Compliance and Communications Management (CM-CCM); Investment Companies Software Solutions (IC-SS); and Investment Companies Compliance and Communications Management (IC-CCM). The CM-SS segment provides Venue and ActiveDisclosure solutions to public and private companies to manage public and private transactional and compliance processes; collaborate; and tag, validate, and file SEC documents. The CM-CCM segment offers tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro, and ArcRegulatory, as well as services that enable storage and management of compliance and regulatory information in a self-service and central repository for accessing, assembling, editing, translating, rendering, and submitting documents to regulators and investors. The IC-CCM segment offers tech-enabled solutions for creating, filing and distributing regulatory communications, and solutions for investor communications, as well as XBRL and iXBRL-formatted filings pursuant for Investment Company Act through the SEC’s EDGAR system. This segment also provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, stockholder meeting review, and expert support. Donnelley Financial Solutions, Inc. was founded in 1983 and is headquartered in Chicago, Illinois.