Critical Analysis: Bankrate (NYSE:RATE) & IHS Markit (INFO)

Bankrate (NYSE: RATE) and IHS Markit (NASDAQ:INFO) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, risk, dividends, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Bankrate and IHS Markit’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bankrate $476.96 million 2.60 $101.21 million ($0.25) -55.60
IHS Markit $3.35 billion 5.45 $973.60 million $0.52 87.98

IHS Markit has higher revenue and earnings than Bankrate. Bankrate is trading at a lower price-to-earnings ratio than IHS Markit, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Bankrate has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500. Comparatively, IHS Markit has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Bankrate and IHS Markit, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bankrate 0 4 3 0 2.43
IHS Markit 1 4 6 0 2.45

Bankrate currently has a consensus price target of $12.71, indicating a potential downside of 8.53%. IHS Markit has a consensus price target of $45.00, indicating a potential downside of 1.64%. Given IHS Markit’s stronger consensus rating and higher probable upside, analysts plainly believe IHS Markit is more favorable than Bankrate.

Profitability

This table compares Bankrate and IHS Markit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bankrate -4.61% 6.50% 4.08%
IHS Markit 6.66% 7.33% 4.15%

Insider & Institutional Ownership

49.2% of Bankrate shares are owned by institutional investors. Comparatively, 99.0% of IHS Markit shares are owned by institutional investors. 6.3% of Bankrate shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

IHS Markit beats Bankrate on 12 of the 14 factors compared between the two stocks.

Bankrate Company Profile

Bankrate, Inc. is a publisher, aggregator and distributor of personal finance content on the Internet. The Company provides consumers personal finance editorial content across multiple vertical categories, including mortgages, deposits, credit cards, senior care and other personal finance categories. The Company’s segments include Banking, Credit Cards, Senior Care and Other. The Company provides a range of digital display advertising formats. The Company is also engaged in the sale of print advertisements and the distribution (or syndication) of its editorial content. The Company offers branded content that educates consumers and financial professionals on a range of personal finance topics. The Company provides a platform for consumers searching for competitive rates on mortgages, deposits and money market accounts.

IHS Markit Company Profile

IHS Markit Ltd., formerly Markit Ltd., is a provider of critical information and analytics for the major industries, financial markets and governments. The Company operates through four segments: Resources, Transportation, Consolidated Markets & Solutions (CMS) and Financial Services. The Resources segment includes its energy and chemicals product offerings. Its energy offerings are focused on upstream, midstream, downstream and power/gas/coal/renewables (PGCR) services. The Transportation segment includes its aerospace, defense and security (AD&S); automotive, and maritime and trade (M&T) product offerings. The CMS segment includes its product design; technology, media and telecommunication, and economics and country risk (ECR) product offerings. The Company’s Financial Services segment provides pricing and reference data, indices, valuation and trading services, trade processing, enterprise software and managed services.

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