Comparing Constellation Software (CNSWF) and Its Peers

Constellation Software (OTCMKTS:CNSWF) is one of 954 public companies in the “Software” industry, but how does it compare to its rivals? We will compare Constellation Software to similar companies based on the strength of its profitability, institutional ownership, valuation, dividends, risk, earnings and analyst recommendations.

Dividends

Constellation Software pays an annual dividend of $4.00 per share and has a dividend yield of 0.2%. Constellation Software pays out 8.8% of its earnings in the form of a dividend. As a group, “Software” companies pay a dividend yield of 1.9% and pay out 45.0% of their earnings in the form of a dividend.

Risk and Volatility

Constellation Software has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Constellation Software’s rivals have a beta of 1.34, suggesting that their average stock price is 34% more volatile than the S&P 500.

Valuation and Earnings

This table compares Constellation Software and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Constellation Software	$11.62 billion	$512.00 million	52.59
Constellation Software Competitors	$1.80 billion	$385.28 million	108.99

Constellation Software has higher revenue and earnings than its rivals. Constellation Software is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Constellation Software and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Constellation Software	7.29%	49.07%	13.29%
Constellation Software Competitors	-607.19%	26.73%	-8.88%

Insider and Institutional Ownership

41.9% of shares of all “Software” companies are owned by institutional investors. 19.9% of shares of all “Software” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Constellation Software and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Constellation Software	0	1	5	1	3.00
Constellation Software Competitors	5776	21575	44959	1498	2.57

As a group, “Software” companies have a potential upside of 29.55%. Given Constellation Software’s rivals higher probable upside, analysts clearly believe Constellation Software has less favorable growth aspects than its rivals.

Summary

Constellation Software beats its rivals on 9 of the 15 factors compared.

Constellation Software Company Profile

Constellation Software Inc. is a Canadian software company that acquires, develops and operates businesses specializing in vertical market software—applications designed for the needs of particular industries or customer groups. Its products support specialized business processes across a range of markets. The company’s software businesses serve customers in both the public and private sectors, providing solutions such as operational and administrative software, along with related maintenance and support.