Head to Head Survey: Pegasystems (NASDAQ:PEGA) vs. Bentley Systems (NASDAQ:BSY)

Bentley Systems (NASDAQ:BSY) and Pegasystems (NASDAQ:PEGA) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Dividends

Bentley Systems pays an annual dividend of $0.28 per share and has a dividend yield of 0.7%. Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Bentley Systems pays out 30.8% of its earnings in the form of a dividend. Pegasystems pays out 7.5% 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. Bentley Systems has increased its dividend for 3 consecutive years. Bentley Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Bentley Systems and Pegasystems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bentley Systems	$1.50 billion	8.26	$277.86 million	$0.91	46.89
Pegasystems	$1.75 billion	3.25	$393.44 million	$1.61	21.53

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

Institutional & Insider Ownership

44.2% of Bentley Systems shares are held by institutional investors. Comparatively, 46.9% of Pegasystems shares are held by institutional investors. 20.3% of Bentley Systems shares are held by insiders. Comparatively, 48.4% of Pegasystems shares are held 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.

Profitability

This table compares Bentley Systems and Pegasystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bentley Systems	18.10%	28.43%	9.69%
Pegasystems	16.86%	35.22%	15.55%

Analyst Ratings

This is a summary of recent ratings and price targets for Bentley Systems and Pegasystems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bentley Systems	0	5	10	0	2.67
Pegasystems	2	7	6	0	2.27

Bentley Systems presently has a consensus target price of $44.77, suggesting a potential upside of 4.92%. Pegasystems has a consensus target price of $45.73, suggesting a potential upside of 31.90%. Given Pegasystems’ higher possible upside, analysts plainly believe Pegasystems is more favorable than Bentley Systems.

Volatility and Risk

Bentley Systems has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Summary

Pegasystems beats Bentley Systems on 9 of the 17 factors compared between the two stocks.

About Bentley Systems

Bentley Systems, Incorporated, together with its subsidiaries, provides infrastructure engineering software solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers open modeling engineering applications, such as MicroStation, OpenBridge, OpenBuildings, OpenCities, OpenComms, OpenFlows, OpenPlant, OpenRail, OpenRoads, OpenSite, OpenTower, OpenTunnel, OpenUtilities, and OpenWindowPower; and open simulation engineering applications, including ADINA, AutoPIPE, CUBE, DYNAMEQ, EMME, LEGION, Power Line Systems, RAM, SACS, SPIDA, and STAAD; and geoprofessional applications for modeling and simulation of near and deep subsurface conditions, including AGS, Central, GeoStudio, Imago, Leapfrog, MX Deposit, Oasis montaj, OpenGround, and PLAXIS. It also provides infrastructure cloud applications, such as ProjectWise, SYNCHRO, and AssetWise, as well as iTwin platform that enables users to create and curate cloud native 4D/5D digital representations of physical infrastructure assets consisting of iTwin Capture, iTwin Experience, and iTwin IoT platforms. The company serves civil, structural, geotechnical, subsurface, process engineers, architects, geospatial professionals, city and regional planners, contractors, fabricators, and operations and maintenance engineers. Bentley Systems, Incorporated was incorporated in 1984 and is headquartered in Exton, Pennsylvania.

About Pegasystems

Pegasystems Inc. develops, markets, licenses, hosts, and supports enterprise software in the United States, rest of the Americas, the United Kingdom, rest of Europe, the Middle East, Africa, and the Asia-Pacific. The company provides Pega Infinity, a software portfolio comprising of Pega Customer Decision Hub, a real-time AI-powered decision engine to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega Customer Service to anticipate customer needs, connect customers to people and systems, and automate customer interactions to evolve the customer service experience, as well as to allow enterprises to deliver interactions across channels and enhance employee productivity; and Pega Platform, an intelligent automation software for increasing efficiency of clients’ processes and workflows. It also offers Situational Layer Cake that organizes logic into layers that map to the unique dimensions of a client’s business, such as customer types, lines of business, geographies, etc.; Pega Express Methodology and low code that connects enterprise data and systems to customer experience channels; Pega Cloud that allows clients to develop, test, and deploy applications; Pega Catalyst, which helps clients to transform and prototype their customer journeys; Pega Academy, which offers instructor-led and online training to its employees, clients, and partners; and global service assurance and client support services. It primarily markets its software and services to financial services, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services markets through a direct sales force, as well as partnerships with technology providers and application developers. Pegasystems Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.