Verisk Analytics (VRSK) vs. International Business Machines Corporation (IBM) Critical Contrast

Verisk Analytics (NASDAQ: VRSK) and International Business Machines Corporation (NYSE:IBM) are both large-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.

Risk & Volatility

Verisk Analytics has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, International Business Machines Corporation has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Earnings and Valuation

This table compares Verisk Analytics and International Business Machines Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Verisk Analytics $2.03 billion 6.54 $941.60 million $2.74 29.42
International Business Machines Corporation $78.44 billion 1.69 $17.19 billion $12.03 11.79

International Business Machines Corporation has higher revenue and earnings than Verisk Analytics. International Business Machines Corporation is trading at a lower price-to-earnings ratio than Verisk Analytics, indicating that it is currently the more affordable of the two stocks.

Dividends

International Business Machines Corporation pays an annual dividend of $6.00 per share and has a dividend yield of 4.2%. Verisk Analytics does not pay a dividend. International Business Machines Corporation pays out 49.9% of its earnings in the form of a dividend. International Business Machines Corporation has raised its dividend for 17 consecutive years.

Institutional & Insider Ownership

93.1% of Verisk Analytics shares are held by institutional investors. Comparatively, 58.7% of International Business Machines Corporation shares are held by institutional investors. 3.4% of Verisk Analytics shares are held by company insiders. Comparatively, 0.2% of International Business Machines Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Verisk Analytics and International Business Machines Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verisk Analytics 22.99% 38.43% 11.47%
International Business Machines Corporation 14.58% 71.53% 11.02%

Analyst Recommendations

This is a summary of current ratings and price targets for Verisk Analytics and International Business Machines Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verisk Analytics 0 9 2 0 2.18
International Business Machines Corporation 6 14 7 0 2.04

Verisk Analytics currently has a consensus price target of $85.30, suggesting a potential upside of 5.81%. International Business Machines Corporation has a consensus price target of $157.63, suggesting a potential upside of 11.13%. Given International Business Machines Corporation’s higher probable upside, analysts plainly believe International Business Machines Corporation is more favorable than Verisk Analytics.

Summary

International Business Machines Corporation beats Verisk Analytics on 9 of the 17 factors compared between the two stocks.

About Verisk Analytics

Verisk Analytics, Inc. is a data analytics provider serving customers in insurance, natural resources and financial services. The Company operates through two segments: Risk Assessment and Decision Analytics. Its Risk Assessment segment serves its property and casualty insurance customers and focuses on prediction of loss, selection and pricing of risk, and compliance with their reporting requirements in each United States state in which they operate. In the Decision Analytics segment, the Company develops predictive models to forecast scenarios and produce both standard and customized analytics that help its customers manage their businesses, including predicting loss, selecting and pricing risk, detecting fraud before and after a loss event, and quantifying losses. It offers predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, natural resources intelligence, economic forecasting and various other fields.

About International Business Machines Corporation

International Business Machines Corporation (IBM) is a technology company. The Company operates through five segments: Cognitive Solutions, Global Business Services (GBS), Technology Services & Cloud Platforms, Systems and Global Financing. The Cognitive Solutions segment delivers a spectrum of capabilities, from descriptive, predictive and prescriptive analytics to cognitive systems. Cognitive Solutions includes Watson, a cognitive computing platform that has the ability to interact in natural language, process big data, and learn from interactions with people and computers. The GBS segment provides clients with consulting, application management services and global process services. The Technology Services & Cloud Platforms segment provides information technology infrastructure services. The Systems segment provides clients with infrastructure technologies. The Global Financing segment includes client financing, commercial financing, and remanufacturing and remarketing.

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