Critical Contrast: SS&C Technologies (NASDAQ:SSNC) versus Recruit (OTCMKTS:RCRUY)

Recruit (OTCMKTS:RCRUY) and SS&C Technologies (NASDAQ:SSNC) are both large-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Recruit and SS&C Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Recruit	0	1	0	1	3.00
SS&C Technologies	1	2	8	1	2.75

SS&C Technologies has a consensus price target of $96.57, suggesting a potential upside of 24.27%. Given SS&C Technologies’ higher probable upside, analysts plainly believe SS&C Technologies is more favorable than Recruit.

Profitability

This table compares Recruit and SS&C Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Recruit	14.94%	35.54%	20.88%
SS&C Technologies	12.76%	21.74%	7.25%

Valuation and Earnings

This table compares Recruit and SS&C Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Recruit	$24.56 billion	6.60	$3.28 billion	$0.52	42.33
SS&C Technologies	$6.27 billion	2.91	$796.90 million	$3.48	22.33

Recruit has higher revenue and earnings than SS&C Technologies. SS&C Technologies is trading at a lower price-to-earnings ratio than Recruit, indicating that it is currently the more affordable of the two stocks.

Dividends

Recruit pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. SS&C Technologies pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Recruit pays out 3.8% of its earnings in the form of a dividend. SS&C Technologies pays out 34.5% 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. SS&C Technologies has increased its dividend for 9 consecutive years. SS&C Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Recruit has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, SS&C Technologies has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Institutional & Insider Ownership

96.9% of SS&C Technologies shares are held by institutional investors. 16.0% of SS&C Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Recruit beats SS&C Technologies on 10 of the 17 factors compared between the two stocks.

About Recruit

Recruit Holdings Co., Ltd. provides HR technology and business solutions that transforms the world of work. It operates through three segments: HR Technology, Matching & Solutions, and Staffing. The HR Technology segment provides various technological solutions that help job seekers and employers in navigating hiring and recruitment. The Matching & Solutions segment offers HR solutions that support business clients’ recruiting and hiring activities and individual users’ job search activities through its job advertising services and placement services. This segment also provides marketing solutions that provide matching platforms for businesses in various industries, including housing and real estate, beauty, bridal, travel, dining, and others, as well as SaaS solutions, which are business and management support tools for small and medium-sized companies. The Staffing segment provides temporary staffing services in Japan, Europe, the United States, and Australia. Recruit Holdings Co., Ltd. operates in more than 60 countries. The company was formerly known as Recruit Co., Ltd. and changed its name to Recruit Holdings Co., Ltd. in October 2012. Recruit Holdings Co., Ltd. was founded in 1960 and is headquartered in Tokyo, Japan.

About SS&C Technologies

SS&C Technologies Holdings, Inc. engages in the development and provision of software solutions to the financial services and healthcare industries. It operates through the following geographical segments: United States, Europe, Middle East and Africa, Asia Pacific and Japan, Canada, and the Americas, excluding the United States and Canada. Its products include advent genesis, antares, asset allocators, AWD, axys, BANC mall, BRIX, DST vision, evare, lightning, and moxy. The company was founded by William Charles Stone in March 1986 and is headquartered in Windsor, CT.