Verisk Analytics (NASDAQ:VRSK) and FactSet Research Systems (NYSE:FDS) Critical Survey

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Verisk Analytics and FactSet Research Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verisk Analytics	1	6	3	0	2.20
FactSet Research Systems	3	6	0	0	1.67

Verisk Analytics presently has a consensus price target of $302.40, suggesting a potential upside of 0.40%. FactSet Research Systems has a consensus price target of $444.25, suggesting a potential downside of 0.84%. Given Verisk Analytics’ stronger consensus rating and higher possible upside, analysts clearly believe Verisk Analytics is more favorable than FactSet Research Systems.

Institutional and Insider Ownership

90.0% of Verisk Analytics shares are held by institutional investors. Comparatively, 91.2% of FactSet Research Systems shares are held by institutional investors. 0.5% of Verisk Analytics shares are held by company insiders. Comparatively, 1.1% of FactSet Research Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Verisk Analytics has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, FactSet Research Systems has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Dividends

Verisk Analytics pays an annual dividend of $1.80 per share and has a dividend yield of 0.6%. FactSet Research Systems pays an annual dividend of $4.40 per share and has a dividend yield of 1.0%. Verisk Analytics pays out 26.4% of its earnings in the form of a dividend. FactSet Research Systems pays out 31.3% 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. Verisk Analytics has increased its dividend for 6 consecutive years and FactSet Research Systems has increased its dividend for 27 consecutive years. FactSet Research Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Verisk Analytics and FactSet Research Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verisk Analytics	$2.88 billion	14.62	$958.20 million	$6.83	44.10
FactSet Research Systems	$2.20 billion	7.72	$537.13 million	$14.06	31.86

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

Profitability

This table compares Verisk Analytics and FactSet Research Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verisk Analytics	33.13%	396.08%	20.50%
FactSet Research Systems	23.30%	31.59%	15.37%

Summary

Verisk Analytics beats FactSet Research Systems on 12 of the 17 factors compared between the two stocks.

About Verisk Analytics

Verisk Analytics, Inc. provides data analytics and technology solutions to the insurance markets in the United States and internationally. It offers policy language, prospective loss costs, policy writing and rating rules, and various underwriting solutions for risk selection and segmentation, pricing, and workflow optimization; property- and auto- specific rating and underwriting information solutions that allows clients to understand, quantify, underwrite, mitigate, and avoid potential loss for risks; catastrophe modeling solutions, which enables companies to identify, quantify, and plan for the financial consequences of catastrophes for use by insurers, reinsurers, intermediaries, financial institutions, and governments. The company also provides life insurance solutions for transforming current workflows in life insurance underwriting, claim insights, policy administration, unclaimed property/equity, compliance and fraud detection, and actuarial and portfolio modeling; Marketing Solutions, such as compliant, real-time decisioning, profitability, and risk assessment for inbound consumer interactions; and international underwriting and claims solutions. In addition, it offers claims insurance solutions, which provides analytics in fraud detection, compliance reporting, subrogation liability assessment, litigation, and repair cost estimation and valuation solutions; and casualty solutions, such as compliance, casualty claims decision support, and workflow automation solutions. Further, the company supplies software to the specialty insurance market. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.

About FactSet Research Systems

FactSet Research Systems Inc., a financial data company, provides integrated financial information and analytical applications to the investment community in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company delivers insight and information through the workflow solutions of research, analytics and trading, content and technology solutions, and wealth. It serves portfolio managers, investment banks, asset managers, wealth advisors, corporate clients, and other financial services entities. FactSet Research Systems Inc. was founded in 1978 and is headquartered in Norwalk, Connecticut.